Au Bon Pain changes hands

January 16, 2008 08:05 AM E-mail| |Comments ()| Text size – +

Boston-based Au Bon Pain said today it has agreed to be acquired by management and LNK Partners, a private equity firm, as it looks to accelerate expansion of a chain with 226 bakery cafes.

Along with affiliates, LNK, whose founding partners include Henry J. Nasella, who engineered the purchase of the local Star Market Co. grocery chain in the 1990s, will invest more than $100 million of equity in Au Bon Pain, Au Bon Pain said, and Compass Group PLC, a global foodservice company that owned the company from 2000 to 2005, will remain an equity and strategic partner.

An investor group led by PNC Mezzanine Capital, which structured and arranged financing support for management's 2005 acquisition of Au Bon Pain, and including AlpInvest Partners N.V., will sell its interest in the company, Au Bon Pain said.

Founded 30 years ago, Au Bon Pain was something of an urban sensation in its salad days; offering some of the convenience of fast-food, yet at a higher quality, it was ideally suited to ground-floor locations in high-rent office buildings filled with affluent workers.

Over the years, though, the chain has had ups and downs as it looked to expand beyond urban office buildings and into the suburbs.

Today Au Bon Pain said LNK's investment will support Au Bon Pain's expansion strategy in the United States and in selected global markets.

Au Bon Pain added that it generated sales revenue of almost $300 million systemwide in 2007.

In the recapitalization transaction, which is expected to close in the first quarter, LNK and Au Bon Pain management will acquire a majority ownership interest in the company, the two entities said.

"Au Bon Pain is poised for significant growth, building on the brand's 30
years of success in the U.S. and internationally," Nasella said in a statement. "The company's management team, which will continue to be led by CEO Sue Morelli, has delivered extraordinary financial results over the past several years, including 33 consecutive quarters of positive comparable store sales and outstanding guest count growth - qualities that distinguish Au Bon Pain as one of the most successful fast casual operators in the restaurant industry."

LNK Partners is based in White Plains, N.Y.
(By Chris Reidy, Globe staff)