Blackstone has agreed to buy Jersey Mike’s Subs, the sandwich chain said Tuesday, valuing the company at about $8 billion including debt, a source said.
Reuters reported on Monday, citing a person familiar with the matter, that Blackstone was close to a deal for Jersey Mike’s.
The deal, which is expected to close in early 2025, underlines the growing interest of private equity (PE) firms in franchise operators.
Last year, PE firms Roark Capital agreed to buy SubwayJersey Mike’s big rival in deal worth up to $9.55 billion.
Jersey Mike’s, known for its submarine sandwiches, traces its roots back to 1956 when Cancro began working at the company’s Point Pleasant, NJ location, which was founded as Mike’s Subs.
Cancro acquired the location in 1975 and began franchising units in 1987. Since then, Jersey Mike’s has become one of the leading fast-casual restaurant chains in America, with over 3,000 locations open and in development across the country.
“We believe we are still in the early innings of Jersey Mike’s growth story and Blackstone is the right partner to help us reach even greater heights,” said Peter Cancro, Founder and CEO of Jersey Mike’s.
Cancro will retain an equity stake in Jersey Mike’s and continue to lead the business.
“Blackstone has helped drive the success of some of the most prestigious franchise businesses globally and we look forward to working with them to help us make significant new investments going forward,” Cancro said.
Blackstone, the world’s largest alternative asset manager with more than $1.1 trillion in assets under management, is on an investment spree in food franchises this year.
In February, Blackstone announced an equity investment in 7 Brew Coffee to fuel the expansion of its drive-thru beverage business.
In April, Blackstone agreed to buy Tropical Smoothie Café, a franchisor of fast casual restaurants, from PE firm Levin Leachman Capital Partners.
“Blackstone has deep experience in helping accelerate the expansion of high-growth franchise businesses and this sector is one of our highest-conviction investment themes,” said Peter Wallace, Senior Managing Director at Blackstone.
Blackstone’s previous franchise deals include its acquisition of Hilton Hotels in 2007 and its investment in ServPro, a franchise in the cleaning and emergency restoration industry.
Guggenheim Securities, Morgan Stanley and White & Case were advisors to Jersey Mike’s. Barclays, Bank of America and Simpson Thatcher & Bartlett advised Blackstone on the deal.
