NEW YORK, November 15, 1999 - Castle Harlan, Inc., the New York merchant bank, announced today it had acquired Marie Callender's Restaurant & Bakery, a chain of family restaurants best known for its freshly baked pies, in a transaction valued at $150 million. (Tombstone said $153 million)
Marie Callender's, based in Orange, California, has 166 restaurants in 12 states, principally in the West and Southwest. The company began making pies 51 years ago and opened its first restaurant in 1964.
The company had revenues last year of almost $230 million and employs more than 10,000 people. The acquisition was made by Castle Harlan Partners III, a $630 million private equity investment fund. BankBoston underwrote senior debt financing of $80 million for the transaction.
David Pittaway, the senior managing director at Castle Harlan who negotiated the acquisition, said Marie Callender's was "poised for significant growth."
"This is a high quality restaurant concept," he said, "that is well-established and respected in the restaurant industry and is also highly regarded throughout the food industry in general.
"The company has built on its signature pies to create a remarkably successful operation with an experienced staff and loyal patrons who are frequent guests."
Leonard Dreyer, president and chief executive officer of Marie Callender's, will continue in that position, Pittaway said. He added that Dreyer and other members of senior management participated in the acquisition with Castle Harlan.
Marie Callender's joins two other restaurant companies in Castle Harlan's portfolio - Charlie Brown's, a group of 37 family restaurants in New Jersey and suburban New York, and Luther's Bar-B-Q, a chain of 19 barbecue restaurants based in Houston.
Castle Harlan is also the former owner of Morton's Restaurant Group, operator of Morton's of Chicago Steakhouses, and McCormick & Schmick's, a group of upscale seafood restaurants.
Castle Harlan Partners III is one of three such funds that Castle Harlan, founded in 1987, has organized and managed. The funds total more than $1 billion and include major corporate and public pension funds, college endowments, foundations and affluent individuals among their investors. The firm has completed acquisitions exceeding $4.5 billion.
Castle Harlan's portfolio companies have included Delaware Management Company, the Philadelphia-based money-management firm with more than $32 billion in assets under management; Truck Components, Inc., the largest manufacturer of components for large-truck braking systems; Smarte Carte, the world's largest airport luggage cart rental company, and MAG Aerospace, the worldwide leader in the manufacture of aircraft sanitation systems.
Currently among its portfolio companies are Universal Compression, Inc., a leading independent provider of natural gas compression equipment and services; Worldwide Flight Services, one of the world's leading providers of ground services to the aviation industry, which was acquired from AMR Corp. in March; and the Verdugt B. V. group of acid salts businesses, based in the Netherlands, which was acquired from BP Amoco in April.
Castle Harlan was founded by John K. Castle, a pioneer in institutionalizing private equity investing through limited partnerships and the former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment banking firm, and by Leonard M. Harlan, founder and former owner and chairman of The Harlan Company, a diversified real estate and corporate finance advisory firm.