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Blackstone To Buy Tropical Smoothie Cafe For Almost $2B

A Tropical Smoothie Cafe in Valdosta, Georgia

Blackstone is preparing to buy one of the country’s 100 largest chain restaurants as it revives its investment activity after a 2023 lull.

The world’s largest private equity firm announced Thursday that it has reached a deal to acquire Tropical Smoothie Cafe from Levine Leichtman Capital Partners. Blackstone is shelling out nearly $2B for the company, including assuming Tropical Smoothie’s debt, The Wall Street Journal reported.

The Atlanta-based franchise smoothie and bowl purveyor has 1,400 locations in 44 states after opening roughly 175 new locations last year, 70% of which were with existing franchise operators, according to a press release.

Tropical Smoothie is the top smoothie or juice franchise in the U.S. and is the 52nd-largest restaurant chain, with more than $1B in sales in 2023, according to food industry consulting firm Technomic

“Tropical Smoothie Cafe has had an impressive growth trajectory consistently building on its loyal customer base as it has scaled nationwide,” Blackstone Senior Managing Director Peter Wallace said in the release. “Blackstone has deep experience helping accelerate the expansion of leading franchise businesses as one of our highest-conviction investment areas.”

Blackstone has had success with franchise businesses, having sold Hilton Worldwide in the most profitable private equity investment in real estate ever at that point, the WSJ reported. It also owns Servpro and has an investment stake in the coffee chain 7 Brew.

The Tropical Smoothie buy is another demonstration that Blackstone is pushing dollars back out into the market after largely remaining on the sidelines with the rest of the private equity industry in 2023 as the shock of ramped-up interest rates impacted valuations, the WSJ reported.

In January, Blackstone agreed to buy single-family rental builder Tricon Residential for $3.5B. Earlier this month, the firm agreed to buy publicly traded apartment owner AIR Communities for $10B.

Blackstone deployed $25B in the first quarter and had an additional $15M in pending deals, President and Chief Operating Officer Jon Gray said during an April 18 earnings call.

“As we've stated before, the recovery will not be a straight line, but we're not waiting for the all-clear sign to invest,” Gray said.