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The appetite for growth at breakfast, brunch and lunch chain First Watch — which has tripled in size in the last five years to some 300 stores — remains big. Big enough that a long-term goal is to hit 1,000 locations.
The east Manatee County-based chain now has a new ally in its quest: Advent International, a global private equity giant with more than $9 billion in investments in 27 years, focusing on the retail, consumer and leisure industries. Current and past companies in Boston-based Advent's portfolio include Noosa Yoghurt; lululemon athletica; fast food chain Bojangles; and Five Below.
Advent acquired a majority stake in First Watch in a deal announced late last month. Terms of the deal weren't disclosed and First Watch's existing management team will continue to lead the company and “retain a meaningful equity stake” in the business, according to a statement.
First Watch President Chris Tomasso says Advent is at the cusp of a big growth opportunity for the chain, given trends in consumer eating habits and markets the firm has yet to tap. First Watch is in 26 states, predominantly Florida, Texas, Ohio, Colorado and Arizona.
“There is a lot of white space for our growth, and I think that appeals to Advent,” Tomasso tells Coffee Talk.
Advent is the third private equity firm to have a stake in First Watch since 2004. The most recent was New York-based Freeman Spogli & Co., which acquired its stake in 2011. First Watch, say Freeman Spogli executives in the statement, delivered 26 straight quarters of positive same-store sales; increased average unit volumes by 22%; and nearly tripled earnings before interest, depreciation and amortization (EBIDTA.)
Several other equity firms looked into First Watch, says Tomasso, when Freeman Spogli began to consider an exit. Advent's interest dates back at least three years, when officials there informally began to check out individual restaurants. The interest grew more serious a few months ago, says Tomasso, and then Advent and First Watch officials began to speak formally, and more often. “We went through a robust and comprehensive interview,” Tomasso says. “They really get and understand our brand.”
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