NEW YORK, February 6, 1997-Castle Harlan, Inc., the New York merchant bank, announced today it had signed an agreement to sell McCormick & Schmick's restaurants of Portland, Oregon, to Apple South, Inc. (NASDAQ/NM:APSO), a large restaurant company based in Madison, Georgia, for $68 million.
The purchase price will be paid in a combination of cash, stock and assumed debt, said David Pittaway, Castle Harlan managing director.
McCormick & Schmick's operates 16 upscale seafood restaurants in Oregon, Washington and California, as well as in Denver and Washington, D.C. Castle Harlan
Partners II, a $275 million investment fund managed by Castle Harlan, made a significant equity investment in McCormick & Schmick's in October 1994. The transaction is expected to close before the end of the first quarter. For Castle Harlan investors, it will represent an annual compound return on the investment of approximately 85 percent, Mr. Pittaway said.
Apple South is a multi-concept restaurant company with more than $500 million in sales. It operates a total of 310 casual dining restaurants in the South, Mid-Atlantic states and Midwest, including 236 Applebee's Neighborhood Grill & Bar locations, 63 Don Pablo's and 11 Harrigan's.
Castle Harlan was founded in 1987 by John K. Castle, former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment banking firm, and a pioneer in private equity limited partnership investing, and Leonard M. Harlan, founder and former chairman of The Harlan Company, a real estate investment and financial advisory firm.
Since its inception, Castle Harlan has completed acquisitions exceeding $2.5 billion.
Castle Harlan investments have included Delaware Management Company, the Philadelphia money management firm with some $30 billion under management; INDSPEC Chemical Corp., a specialty chemical company; Smarte Carte, the airport baggage rental company, MAG Aerospace, the world's leading manufacturer of aircraft sanitation systems, and Commemorative Brands, Inc., one of the leading manufacturers and distributors of class rings and other specialty jewelry under the ArtCarved and Balfour brand names.