News

FOCUS parent looks to add new brands

August 13, 2009

Roark Capital Group, parent company of FOCUS Brands and its Schlotzsky's, Carvel and Cinnabon chains, could invest more money this year than in its previous eight years with new deals expected to be reached within the next two months, according to a story in The Atlanta Journal-Constitution.

"Roark said it's in active discussions with several companies that should lead to new investments soon. Roark expects to add to its portfolio this year with equity investments that could total $200 million to $250 million, executives said in a recent interview at their Midtown offices.

"These investments mean the Atlanta-based firm could have even more ties to up-and-coming franchised businesses. They also reflect a belief by Roark that the economy has bottomed out.

"'We have been concerned and bearish about the economy and the debt markets for about 18 months now,' said Neal Aronson, Roark founder and managing partner. 'We have been cautious and haven't invested our capital. Now, we feel like we're ready to start investing again.'
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"Despite the banking crisis, Roark is well-positioned because it relies less on borrowed money than most private equity firms, Aronson said. Roark's deals on average involve about 60 percent of its equity and 40 percent debt. Most private equity firms use debt for well over half of the purchase."

Roark recently announced that Cinnabon president Geoff Hill will become vice president of the private equity company, effective Jan. 1.