Blackstone approaches burrito maker Zambrero and asks KWM for help

His attention was drawn to Zambrero, owned by founder Sam Prince, who started the franchise business with a Canberra outlet in 2005. Prince called on bankers for business ideas last month, as revealed by Street Talk.

Bankers estimate that Zambrero would likely be worth more than $500 million, based on his network of more than 230 restaurants, though much would depend on the type of transaction his founder was seeking.

The talks come as rival Mexican food chain Guzmán y Gómez garnered a $1.2 billion valuation when Magellan Financial Group sold its 11.6 percent stake in May. The deals acted as a useful valuation marker for anyone thinking of another transaction in the sector or, indeed, any deal involving Guzmán himself.

Zambrero’s strategic review has bankers thinking about all sorts of possible deal structures, including a full or partial sale to a PE-hungry store like Blackstone. Other deals being talked about within the investment banks include Zambrero merging with Guzman and Gomez (good opportunity for the ACCC to order some burritos as well), or with PAG’s Craveable Brands, which owns Port and Red Rooster.

Blackstone has extensive experience in fast food businesses globally, including as the former owner of Heartland Food Corp, which had a large portfolio of Burger King restaurants in the United States, and Burger King in New Zealand, which went into receivership in 2020.

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