UPDATE: Jan. 11, 2018: Centerbridge Partners' P.F. Chang's has officially informed investors that it has agreed to be sold to TriArtisan Capital Advisors and Paulson & Co. The sale is expected to close by the end of the first quarter.
- TriArtisan Capital Advisors is reportedly in talks to acquire P.F. Chang's for up to $700 million from Centerbridge Partners, according to Bloomberg.
- TriArtisan is said to be in talks with lenders to finance the deal, but no final decision has been made at this time.
- Centerbridge bought P.F. Chang's and Pei Wei Asian Diner in 2012 for $1.1 billion.
Consolidation within the restaurant industry has increased in the last two years, with 75 deals completed during that period compared to 29 deals in 2015 and 2016 combined, according to Restaurant Business. Various analysts have told Restaurant Dive that private equity firms, many of which focus heavily on consumer-oriented companies, are turning away from investing in retail brands and are instead looking to restaurants.
A potential sale of P.F. Chang’s, which has over 200 units in the U.S., could be the start of another active year for restaurant mergers. Several brands, including Papa John's, Papa Murphy's and Jack in the Box, have already said they are looking into potential sales. In addition to consolidation of major brands, large franchisees also have been considering big buys. Franchisee Flynn Restaurant Group bought U.S. Beef Corp last year, adding over 350 Arby's chains to its over 1,200-unit portfolio.
The sale of P.F. Chang's appears to be part of the plan all along. In 2017, Centerbridge split Pei Wei Asian Diner from P.F. Chang’s. Restaurant consultant John Gordon previously told QSR Magazine that the split could have been Centerbridge preparing for a possible sale, since private equity typically sells off assets after seven years.
Gordon's assessment proved true when Centerbridge hired Bank of America and Barclays last summer to look into a sale of P.F. Chang’s, but not Pei Wei.
If Triartisan goes through with the sale, it would be buying a stronger brand than when Centerbridge bought it in 2012. The potential buyer also has some experience investing in casual dining chains; it was part of a group of investors that bought TGI Friday’s in 2014, according to Bloomberg.
P.F. Chang's underwent some changes after it stumbled during and shortly after the recession. The restaurant didn't partake in much menu innovation and marketing changes during the downturn, only later pushing to add lunch items and adjust pricing to try and boost traffic, according to the Wall Street Journal.
The restaurant chain's CEO Michael Osanloo previously told AZ Central that under Centerbridge, the brand strengthened operations. Each unit generated a little over $4 million in sales volume in 2017. Total sales in 2017 rose to $913 million compared to $906 million in 2016.