Blackstone announced Tuesday that it has agreed to buy Jersey Mike's Subs, valuing the company at about $8 billion, including debt, one person said.
Reuters reported on Monday, citing people familiar with the matter, that Blackstone was nearing a deal with Jersey Mike's.
The deal, expected to close in early 2025, highlights private equity (PE) firms' growing interest in franchise operators.
Last year, PE firm Rourke Capital agreed to buy Subway, Jersey Mike's biggest rival, in a deal worth up to $9.55 billion.
Jersey Mike's, known for its submarine sandwiches, traces its roots back to 1956 when Cancro started working at the company's Point Pleasant, New Jersey, location and was founded as Mike's Subs.
Cancro acquired the store in 1975 and began franchising it in 1987. Since then, Jersey Mike's has grown to become one of America's leading fast-casual restaurant chains, with more than 3,000 locations nationwide and expanding.
Peter Cancro, Jersey Mike's Founder and CEO We believe that we are the right partner to help.”
Cancro will maintain an equity stake in Jersey Mike's and continue to lead the business.
“Blackstone has helped drive the success of some of the world's most iconic franchise businesses, and we look forward to continuing to work with them to support important new investments,” said Cancro.
Blackstone, the world's largest alternative asset manager with more than $1.1 trillion in assets under management, has been investing heavily in food franchises this year.
In February, Blackstone announced an equity investment in 7 Brew Coffee to help expand its drive-thru beverage business.
In April, Blackstone agreed to buy fast-casual restaurant franchisor Tropical Smoothie Cafe from private equity firm Levine Leichtman Capital Partners.
“Blackstone has extensive experience helping high-growth franchise businesses accelerate their expansion, and this is one of our most confident investment themes,” said Blackstone Senior Managing Director. Peter Wallace says.
Blackstone's previous franchise agreements include the 2007 acquisition of Hilton Hotels and its investment in cleaning and emergency recovery industry franchise Servpro.
Guggenheim Securities, Morgan Stanley, and White & Case served as advisors to Jersey Mike's. Barclays, Bank of America and Simpson Thacher & Bartlett advised Blackstone on the transaction.
