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MOUNTAINSIDE, NJ-Trimaran Capital Partners is buying Charlie Brown's 54 steakhouse restaurants for $140 million from Castle Harlan, which acquired the company eight years ago from Restaurant Associates for $40 million. The management will stay the same, but the number of units is positioned for what Lauri Piro, Charlie Brown's director of marketing, describes as "massive expansion."

Both the seller and the buyer are New York-based private equity investment firms. Castle Harlan has other restaurant chains in its portfolio, but this marks Trimaran's entry into this market. "We have been seeking the right opportunity to invest in the restaurant industry for a number of years," says Andrew Heyer, a co-founder and managing partner of Trimaran. "We believe that Charlie Brown's represents an excellent opportunity to invest in a company with attractive growth prospects and a great track record…with an exceptional management team as our partner."

According to Justin Wender, Castle Harlan's senior managing director, "Charlie Brown's has more than doubled its revenues since [Castle Harlan's] acquisition and the company's growth prospects continue to be outstanding." Charlie Brown's has had 13 consecutive years of comparable store sales growth.

There are currently 45 Charlie Brown's units, described as neighborhood steakhouses; two Jolley Trolley Bar & Grill units; and seven Office Beer Bar & Grill units. The latter two are described as more casual than the flagship brand. All are located in New Jersey, New York and Pennsylvania.

Piro says an additional six to eight units are near completion, "and we anticipate hitting 100 within the next several years. We're expanding wisely," she adds, "and will move outside our radius slowly so the name recognition will have overlap." While the majority of expansion will take place under the Charlie Brown's identity, she says the company is "looking for opportunities for all the brands."

Charlie Brown's was founded in 1966, but entered its period of greatest growth since Russell D'Anton, current CEO, joined in 1976. He has spent his entire career with the company, held virtually every significant operating position and was named president and CEO in 1997. In connection with the Trimaran acquisition, he will also become chairman of the board.

Current Charlie Brown's senior management team will be investors in the Trimaran transaction, but Piro says she's unable to disclose the team's proportion of ownership "until our stockholder meeting." The transaction is expected to close this quarter.

"With our new capital structure in place," D'Anton says, "Charlie Brown's will be able to take advantage of real estate opportunities and execute its growth strategy." He also says he looks forward to growing the company "into a substantial player in the restaurant industry."

"We're a strong believer in the demographic trends supporting the restaurant industry," Heyer adds, "and believe that Charlie Brown's is well positioned for growth within existing and contiguous markets." He points specifically to the growth in purchases of food away from home, the aging of the US population, the rise in the number of working women and increases in household income.

Instant Insights /

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