Equity Partners HG Logo

Equity Partners HG brokers sale of Bartlett Management, Inc. to EYM Foods II, LLC

 

For Immediate Release | February 1, 2019

Bartlett Management Services, Inc. and its two affiliates, Bartlett Management Indianapolis, Inc., and Bartlett Management Peoria, Inc. (“Bartlett” or “the Company”) completed a going concern sale of its 30 Kentucky Fried Chicken franchise locations to EYM Foods II, LLC (“EYM”). EYM is an affiliate of Irving, Texas based EYM Group, which owns and operates 241 restaurants with 5,400 employees. Its restaurant holdings include 58 Denny’s, 29 Burger Kings and 154 Pizza Huts. Equity Partners HG, a Maryland-based investment banker, served as intermediary for the seller and conducted an auction that included 2 suitors for the business.

The Bartlett operation was divided into three different geographical divisions including Central Illinois, Northern Illinois/Wisconsin and Indianapolis. The Company leased 26 of its 30 locations and owned 4, as well as its corporate headquarters in Clinton, Il. The seller originally purchased the Company in 2008 after working for the previous owner since 1997. With a team of approximately 70 salaried and 570 hourly employees in place, Bartlett was consistently one of KFC Corporation’s top performing operations

Costs involved with equipment leases, a management/advisory agreement, and real property leases, as well as the recession of 2008-2010, resulted in a decrease in revenue, and an inability to sustain positive cashflow, ultimately leading the Company to seek Chapter 11 bankruptcy protection in December of 2017. In mid-September of 2018, Bartlett retained Equity Partners HG as the exclusive court approved broker to seek an investor, joint venture partner or buyer for the Company.

Equity Partners conducted an exhaustive marketing process that resulted in 70 groups conducting due diligence, with 9 of those groups engaging in significant discussions about the opportunity. In order to become a qualified bidder, interested groups were required to not only show financial wherewithal to purchase the operation, they also had to be qualified by KFC Corporate to be a franchisee. The Debtor’s professionals also had to negotiate revised building leases with 13 landlords that would be acceptable to a new buyer. This effort resulted in 3 groups submitting offers by the bid deadline, and 2 of those groups were qualified by KFC Corporate to participate in the auction. Equity Partners HG conducted an auction in Bloomington, IL on December 20, 2018. After numerous rounds of bidding, EYM was deemed the winning bidder and proceeded to close.

Hank Waida, managing director for Equity Partners HG, said, “This was an extremely complicated engagement with numerous moving parts and requirements that needed to be met by many of the constituents involved. It took significant concessions by all parties to get this deal across the finish line and save more than 600 jobs.”

Other professionals who worked on the transaction include:
• Jonathan A Backman, Law Offices of Jonathan A. Backman, counsel for Bartlett
• Steven A. Nerger, Silverman Consulting, Inc., chief restructuring officer for Bartlett
• Mark Bogdanowicz, Howard & Howard, counsel for Heartland Bank and Trust
• Erika Barnes, Sites & Harbison PLLC, counsel for Yum Brands
• Mathew McClintock, Goldstein & McClintock LLP, counsel for the creditor’s committee