West L.A. private-equity firm Brentwood Associates usually holds on to its investments for six years or so. But it was nearly eight years before Brentwood tried to sell Pacific Island Restaurants Inc. – the sole franchisee of Pizza Hut and Taco Bell in Hawaii, Guam and Saipan.
A deal closed last month. The longer term speaks to how successful an investment the franchisee proved to be, said Rahul Aggarwal, a managing director at Brentwood.
“We didn’t entertain any opportunities to sell the business until last year,” he said. “The company continued to perform throughout the recession. There wasn’t any real impetus to sell any sooner.”
Financial terms of Brentwood’s sale were not disclosed and the buyer, Nimes Capital LLC, did not return calls for comment. Pacific Island is the largest restaurant operator in Hawaii, Guam and Saipan, with 80 restaurants and more than 2,000 employees.
The restaurant group’s sale to Nimes in Century City, a private-equity firm controlled by the Nazarian family, shows that franchised restaurants remain attractive targets for private equity.
Take, for instance, another big franchisee deal that closed last month: New York private-equity fund Sentinel Capital Partners sold Corona’s Southern California Pizza Co. LLC, the largest Pizza Hut franchisee in California to private-equity firm Sterling Investment Partners in Westport, Conn.
“These make great private-equity investments,” Aggarwal said. “The fast-food industry has a lot of brands that have performed through several recessions and that have consistent revenue growth. When you’re looking for deals, you’re looking for those kinds of characteristics.”
Northern Exposure
City National Bank already has a handful of branches in Northern California, but the bank last month increased its presence there, hoping to get more business from the region’s technology firms, especially startups.
The bank, part of downtown L.A.’s City National Corp., in December hired two bankers away from the technology and life science division of Comerica Bank, the banking brand of Dallas-based Comerica Inc.
Rod Werner was hired as a managing director of technology banking and John Kreutter as a senior vice president of credit administration. Both will be based in Palo Alto.
Robert Brant, City National’s regional executive for the Bay Area, said Werner and Kreutter will help the bank build relationships with venture capitalists and venture-backed startups.
“What these bankers bring is the ability to play in the early stage section, which takes special expertise,” Brant said. “You want to catch companies when they’re young and then continue to grow with them.”
Along with the new tech-focused bankers, City National plans to open two Bay Area branches, including one in San Francisco’s South of Market neighborhood, which is home to tech companies such as Twitter Inc. and Dropbox Inc.
Admiralty Adopts
L.A. private-equity firm Admiralty Partners Inc. last week closed its acquisition of a business unit of Canadian aerospace company MacDonald Dettwiler and Associates Ltd.
Admiralty, an aerospace- and defense-focused private-equity firm run by industry veteran Jon Kutler, will acquire MDA’s composite structures and assemblies business, headquartered in Los Alamitos. The unit, which makes parts for satellites built by Boeing Co. and other contractors, will now be called Alliance Spacesystems LLC.
Financial terms were not disclosed.
In an email, Kutler described the former MDA unit as a “corporate orphan” that wasn’t a big enough part of MDA’s core business to get enough capital or attention from the parent company.
He said Admiralty has experience building up such companies and is familiar with composite firms, having owned one previously.
Wendy Keyzer, a spokeswoman for MDA in Richmond, British Columbia, said the company was looking to sell the composite structures business, which was no longer a priority after MDA’s acquisition last year of Palo Alto’s Space Systems/Loral.
C-Suite News
Brendt Stallings and Husam Nazer have joined DoubleLine Equity LP, a new affiliate of downtown L.A.’s DoubleLine Capital LP, as partners. Both Stallings and Nazer were formerly with TCW Group Inc., the L.A. firm that fired Jeffrey Gundlach, who’s now chief executive of DoubleLine Capital, in 2009. The hiring of Stallings and Nazer marks the entry of DoubleLine, a fixed-income investor, into equities. … Donald P. Johnson, chief executive of American Business Bank in downtown Los Angeles, was elected last month to the board of NewBridge Bancorp, the Greensboro, N.C., parent of NewBridge Bank. … Rajath Shourie, a managing director at Oaktree Capital Management, has been appointed to the board of the non-profit Greater Los Angeles Zoological Association, which supports the Los Angeles Zoo and Botanical Gardens.
Staff reporter James Rufus Koren can be reached at [email protected] or (323) 549-5225, ext. 225.
