Jersey Mike's Just Got Bought For $8 Billion
A private equity firm has decided to take a massive bite out of the sandwich chain industry by purchasing Jersey Mike's, one of the top five largest sandwich chains in the country, for a whopping $8 billion. The billion dollar price tag includes any of the sandwich chain's debts, and Reuters reports the deal is expected to officially close in early 2025.
Jersey Mike's was founded in 1956 as a single sandwich shop in New Jersey and has since grown to almost 3,000 locations nationwide. In fact, in 2022 it was named the fastest growing restaurant chain by QSR Magazine; the chain grew its footprint by 246 locations from 2020 to 2021. Per its website, Jersey Mike's currently has 297 new locations in the works.
Blackstone, the private equity firm that has agreed to purchase Jersey Mike's, was reportedly in talks with the chain's leadership for almost three years before coming to a final agreement. As part of this tentative agreement, Blackstone will help the brand grow both in the U.S. and internationally and will not pay the full purchase price until Jersey Mike's opens its 4,000th location.
Plus, Jersey Mike's founder and CEO, Peter Cancro, will keep a large stake in the business and continue to run it as CEO. While Blackstone will not be in charge of operations of Jersey Mike's, this is not the firm's first venture into food. Earlier this year the firm invested in 7 Brew Coffee, a drive-thru beverage business, and purchased Tropical Smoothie Cafe, another franchise of restaurants. This also isn't the only private equity firm looking to score big by placing its money with restaurant chains.
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Another Billion Dollar Sandwich Deal Happened Earlier This Year
While Jersey Mike's $8 billion price tag is large, it's not even the largest sandwich chain purchase to be made this year. After a long search and a self-valuation of $10 billion, Subway was purchased by the private equity firm Roark Capital Group for $9.55 billion.
Similar to Blackstone, Roark Capital Group holds at least partial ownership of major restaurant brands such as Arby's, Culver's, Carl's Jr., Hardee's, Dunkin', and Jimmy John's (another major sandwich chain). So, the firm's purchase of Subway, while big news in the realm of sandwiches, was not a surprise when looking at the company's portfolio.
Subway has long held its position as the top sandwich chain in the country, just based on its overall big footprint. Nation's Restaurant News, in its annual Top 500 Report for 2023, noted Subway as the biggest chain in the U.S. because of its 20,576 locations as of 2022. Will this recent Jersey Mike's purchase help propel the chain to Subway's level? Only time will tell.
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