Fogo de Chão announced Tuesday that it will be acquired by Bain Capital ahead of an accelerated growth plan.
Financial details of the transaction were not disclosed. The agreement is expected to close in September. Fogo’s leadership team will remain in place, including CEO Barry McGowan.
The 76-unit Brazilian steakhouse has been owned by Rhône Capital since 2018. Under the firm’s ownership, the brand is in its third year of 15 percent annual store growth. About 60 of the chain’s stores are in the U.S.
“Over the past several years, we made significant progress enhancing our unique offering and ability to bring the very best in experiential dining to more guests than ever before. We thank the Rhône team for their partnership during a critical and successful period in our history,” McGowan said in a statement. “Bain Capital shares our vision, and we are excited to leverage their extensive experience investing in and supporting the global growth of restaurant businesses. We are excited by this next chapter and believe there is tremendous upside in our future as we continue to execute against our growth plans with Bain Capital.”
The chain deploys a unique, all-you-can-eat serving format in which “gauchos” float around the dining room and slice pieces of meat off the skewers tableside. Customers can flip a card on their table to “green” which means “more please,” or red for “no thanks” to have more time to savor their cuts.
Fogo is prepared for worldwide expansion opportunities in places like Ecuador, Turkey, Rhode Island, and Northern California. This year, it has signed 12 domestic and international leases and opened in Washington, Maryland, California, and New Jersey. In 2018, Fogo’s demographics consisted of 79 percent millennial and Gen X. In 2022, the brand reported 87 percent of its customers were Gen Z, millennial, and Gen X. Fogo averaged 129,000 guests per U.S. restaurant in 2019, capping six straight years of positive traffic growth. The number of visits turned negative in 2020 due to COVID, but positive flow returned in 2021.
The brand filed paperwork to go public in November 2021, but never took it a step further. This would’ve been its second time trading on the stock market. Fogo first went public in June 2015, with a value of roughly $545 million. In February 2018, private-equity firm Rhône Capital purchased the steakhouse for $560 million in an all-cash deal.
Since being founded in 1984, Bain Capital has made primarily or add-on investments in more than 1,150 companies. Past ventures include Bloomin’ Brands, Burger King, Domino’s, and Dunkin’ Brands. It currently manages roughly $175 billion in total assets.
“Barry and his team have done an impressive job building on the brand’s differentiated concept, strong value proposition, and rich Brazilian heritage. Fogo is the clear market leader, and we believe the business is poised to continue its rapid growth as consumers increasingly seek unique and authentic dining experiences,” Adam Nebesar, a partner at Bain Capital, said in a statement.
Debt financing for the transaction is being led by Deutsche Bank, who is also serving as financial advisor to Bain Capital. PwC is serving as accounting advisor, and Kirkland & Ellis is serving as legal counsel to Bain Capital.
Morgan Stanley & Co. is serving as the exclusive financial advisor, Deloitte is serving as accounting advisor, and Sullivan & Cromwell is serving as legal counsel to Fogo and Rhône.