Levine Leichtman Capital Partners, a middle market private equity company, is reportedly considering the sale of the US restaurant chain Tropical Smoothie Café.
According to reports from Reuters, the prospective transaction might be assessed at $2 billion.
Levine Leichtman has appointed the investment bank Robert W Baird & Co to initiate the potential sale.
Sources, seeking anonymity due to confidentiality concerns, indicate that the sale is set to initiate as early as January 2024.
The potential valuation of Tropical Smoothie Café could reach 20 times its estimated 12-month annual earnings before interest, taxes, depreciation, and amortization (EBITDA) of $100 million.
Nevertheless, no assurance of a deal can be provided at this juncture.
Founded in 1997, Tropical Smoothie Café provides a variety of chocolate, vegetable, and fruit smoothies, along with wraps, salads, sweets, healthy bowls, flatbreads, and sandwiches.
Levine Leichtman Capital Partners acquired the brand in September 2020.
At the time of the acquisition, the US-based chain had 870 cafes.
Subsequently, Tropical Smoothie Café has expanded its presence by opening additional outlets, currently overseeing 1,335 cafés across 44 states in the US, predominantly through franchise operations.
During the third quarter of the fiscal year 2023, the Atlanta, Georgia-based chain registered positive same-store sales while persisting in its franchise expansion efforts.
Tropical Smoothie Café considered an initial public offering (IPO) in 2022, but the move was not executed after the IPO market became hostile, especially for restaurant companies.
In June 2023, the DYNE Hospitality Group, a franchisee of Tropical Smoothie Café, announced the opening of a new location in Little Rock, Arkansas.
