NEW YORK, March 10 -- Castle Harlan, Inc., the New York merchant bank, announced today that it had completed the sale of McCormick & Schmick's restaurants of Portland, Oregon, to Apple South, Inc. (Nasdaq/NM:APSO), a large restaurant company based in Madison, Georgia, for $68.5 million.
The price included a combination of cash, stock and assumed debt, according to David Pittaway, Castle Harlan managing director. The transaction closed less than a month after an agreement of sale was signed.
McCormick & Schmick's operates 16 upscale seafood restaurants on the West Coast and 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 sale of its stake in the company brought an annual compound return to its investors of approximately 88 percent.
Castle Harlan, founded in 1987, announced earlier this week that it had formed its third private equity investment fund, Castle Harlan Partners III, with commitments of $610 million. More than 85 percent of the investors in the new fund, primarily pension funds and endowments, had participated in Castle Harlan's earlier funds.
John K. Castle, former president and chief executive officer of Donaldson, Lufkin & Jenrette, the investment banking firm, is chairman of Castle Harlan. Leonard M. Harlan, founder and former chairman of The Harlan Company, a real estate investment and financial advisory firm, is president.
Since its inception, Castle Harlan has completed acquisitions exceeding $3 billion. Through December 31, 1996, Castle Harlan Partners II had earned a compound annual return of approximately 82 percent.
Castle Harlan investments have included Delaware Management Company, the Philadelphia money management firm with some $32 billion under management; Indspec Chemical Corp., a specialty chemical company; Smarte Carte, the world's largest airport luggage cart 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.