Food & Beverage

Tropical Smoothie Cafe acquired by Levine Leichtman Capital

istock

September 8, 2020

Levine Leichtman Capital Partners, a Los Angeles-based private equity firm, has acquired Tropical Smoothie Cafe LLC, which has more than 70 units in 44 states. CEO Charles Watson will contine to run Tropical Smoothie Cafe, which was founded in 1997 and headquartered in Atlanta, according to a company press release.

"We are excited to partner with Charles and the rest of the management team who have led the tremendous growth of Tropical Smoothie Cafe," Matthew Frankel, managing partner of LLCP, said in the release. "We look forward to working with them as they continue to increase system-wide sales, improve franchisee unit economics and expand unit count in the significant remaining whitespace."

Watson was also positive about the news.

"Having the opportunity to leverage LLCP's extensive franchise expertise will be pivotal in driving further growth and supporting franchisees in inspiring better in our guests," said Waston, who took over as CEO last year.

Tropical Smoothie Cafe will be the fifth investment from Levine Leichtman Capital Partners, which manages $11 billion of institutional capital across 14 investment funds and has invested in over 85 portfolio companies. It manages $7 billion of assets — including its most recent flagship fund — Levine Leichtman Capital Partners VI, L.P., which closed in 2018 with $2.5 billion of committed capital.

LLCP was advised by Kirkland & Ellis LLP. Debt financing was provided by Golub Capital. Management was advised by Jamieson and Peter Klein, P.A., and Tropical Smoothie Cafe was advised by Robert W. Baird & Co. and Alston & Bird LLP.

In January, Tropical Smoothie reported its eighth consecutive year of same-store sales growth.