(GP Investments) August 7, 2011 – GP Investments, Ltd. (“GP Investments”), a leading private equity firm in Latin America, announces the acquisition, through its vehicles, of an additional 65% stake in the leading Brazilian steakhouse group Fogo de Chão Churrascaria, LLC (“Fogo de Chão” or “the Company”). After this transaction, GP Investments’ vehicles will hold a 100% ownership in the Company.
The acquisition marks an important new stage in the development of the highly successful Company, which now has 16 restaurants in the United States and seven in Brazil and has consistently delivered above industry growth and leading unit level economics over its history.
After opening the first restaurant in 1979, Fogo de Chão enjoyed a long growth cycle led by its founders and management team until 2006, reaching nine restaurants – three in Brazil and six in the United States. In 2006, the founders and GP Investments joined forces to lead a new cycle designed to continue its accelerated growth and prepare the Company’s management and governance structure to perpetuate the business. Over these past five years, Fogo de Chão has more than doubled its number of units and established itself as one of the leading Brazilian service companies in the United States, where it is known for the slogan “A taste of Brazil in America”, proudly spreading a unique portion of Brazilian traditions and culture.
With a fully professionalized management team, formed by experienced and highly qualified executives, Fogo de Chão is ready for a new independent growth path. Upon completion of this cycle, the founders sold their remaining stake in the Company.
“We are delighted to increase our participation in a company that has sustained industry leading profitability and operating metrics and is ranked the best fine dining restaurant in most of its locations in the United States. i The founders’ original vision back in 1979 was instrumental for such a successful dining concept,” said GP Investments’ Managing Partner Danilo Gamboa.
Together with co-investors, GP Investments’ private equity fund GP Capital Partners III, L.P. (“GPCPIII”) held a 35% stake in the Company. Fogo de Chão, which has a strong debt capacity due to its consistent cash flow generation, is fully financing the acquisition of the 65% of stock held by its founders through a new debt facility. The transaction valued Fogo de Chão’s equity at US$95 million, post-money. After this transaction, GPCPIII will hold a 50% stake in the Company while co-investors will hold the remaining 50% through funds managed by GP Investments.
Mr. Larry Johnson, Fogo de Chão’s CEO since 2007, is committed to further expansion of what he sees as an exceptionally successful restaurant concept, supported by a unique business model and a strong management team: “We are looking at opening two or three new restaurants a year in the United States and one a year in Brazil.” The potential, he said, is for Fogo de Chão to more than double in size in its current markets, tapping into 30 to 40 new locations in the U.S. and Brazil, not to mention possibilities of expanding to new regions.
Fogo de Chão’s restaurants offer personal, Southern Brazilian-style service in a relaxed, up-market setting. Fogo de Chão’s prix fixe menu features 15 different cuts of freshly grilled meats carved tableside by Brazilian-trained gaucho chefs, which are complemented by an extensive salad bar and typical Brazilian sides. The menu is, in essence, a value proposition in which all the meat and salad items are unlimited and guests can enjoy as much or as little of anything they would like. Customers also enjoy a full service bar which includes a renowned and award-winning wine menu.
About Fogo de Chão Churrascaria, LLC
Fogo de Chão is a premier churrascaria (Brazilian steakhouse) in the United States and Brazil. The restaurant’s dining experience is based on the centuries-old gaucho tradition known as churrasco, the gaucho way of preparing meat.
The Company’s U.S. restaurants are in Atlanta, Austin, Baltimore, Beverly Hills, Chicago, Dallas, Denver, Houston, Indianapolis, Kansas City, Miami, Minneapolis, Philadelphia, San Antonio, Scottsdale, Washington DC, Las Vegas and Orlando – the last two to be opened in the coming months. Brazilian outlets are in Vila Olímpia, Moema and Santo Amaro in São Paulo; Salvador, Brasília, Belo Horizonte and Rio de Janeiro.
About GP Investments, Ltd.
GP Investments is a leading private equity firm in Latin America. Its mission is to generate higher than average long – term returns for its investors and shareholders. Since its inception in 1993, the firm has raised approximately US$5 billion from international investors and has acquired 49 companies in 15 different sectors. In May 2006 GP Investments concluded its initial public offering, thus becoming the first listed private equity company in Latin America. For more information see GP Investments’ web-site (www.gp-investments.com) or contact the company’s media staff.