Executives of the successful Chart House restaurant chain Wednesday purchased the 54-outlet company from parent Pillsbury Co., which has owned the chain only since June.
Terms of the deal, referred to as a leveraged buy-out, were not disclosed. A leveraged buy-out typically involves using the purchased company’s assets as collateral and repaying the resulting debt from future earnings.
Pacific Ocean Enterprises, recently formed by Chart House executives solely to buy the restaurant chain, will be based in Solana Beach, about 15 miles north of San Diego. The new company is headed by John Creed, who was president of the Chart House unit, and Shawn Holder, executive vice president. Five other vice presidents and investment banker First Boston Corp. also participated in the buy-out, officials said.
Minneapolis-based Pillsbury sold the restaurant chain because it “didn’t feel it would be a good fit . . . nor would we be able to grow it,” according to Jerry Levin, Pillsbury executive vice president.
Pillsbury purchased Chart House in June as part of its $360-million acquisition of Diversifoods Inc., which included Chart House, Burger King and the Godfather’s Pizza chain.
Pillsbury’s other dinner house chains have “at least 200 units,” according to Levin. “We’re better at large-scale things.”
Pillsbury will divest other of its smaller restaurants, including Cisco’s, Moxies’, Luther’s and the Cork n’ Cleaver, but it will retain the 4,500-outlet Burger King chain, Levin said.
The Chart House chain, with annual sales last year of about $87 million, opened its first restaurant in Aspen, Colo., in 1966, and was incorporated in 1971. It has been based in the San Diego area since then.
Chart House now has outlets from Hawaii to the Virgin Islands, according to spokeswoman Sally Kennerly, including six in San Diego County, four in Los Angeles and two in Orange County.
The chain employs about 5,000 workers, including 90 at its new headquarters, she said.