PRIVATE EQUITY OWNED
Fogo de Chão
Includes Fogo de Chao, Fogo
brazilian steakhouse · Dallas, TX
- PE Firm
- Bain Capital →
- Year Acquired
- 2023
Three private equity firms in eleven years, but sure, this time it's about 'accelerating growth.'
The PE Playbook
- Passed through three PE owners since 2012 — Thomas H. Lee ($400M), Rhône Group ($560M), and now Bain Capital ($1.1B) — each one flipping the chain for a bigger payout while loading more debt
- Bain financed the $1.1 billion deal with a $550 million bank loan and $75 million credit facility — over half the purchase price is borrowed money strapped to the restaurants
- Thomas H. Lee took the chain public in 2015 at $20/share, but the stock never gained traction — Rhône swooped in to take it private again for $560M in 2018, then sold to Bain for nearly double
- Rhône filed for a second IPO in 2021 targeting $200 million, then withdrew it when Bain offered $1.1 billion instead — PE firms keep passing Fogo around like a churrascaria skewer
Since the Acquisition
- The full churrasco dinner has crept from around $49-55 per person to $59 on average, with the 'Best of Brazil' promo jumping from $39 to $49 in a single year — death by a thousand small price hikes
- Customer satisfaction has cratered to 1.7 out of 5 stars on PissedConsumer, with recurring complaints about declining meat quality, inconsistent service, and management ignoring follow-up
- Alcohol sales pushed from 10% to 14% of total revenue under the growth approach — upsell pressure on $16 cocktails and wine pairings keeps climbing while the core dining experience holds steady
- Bain's expansion plan targets 100 locations and $1 billion in revenue within five years — rapid unit growth funded by borrowed money is the classic PE recipe for stretching quality thin
Sources
- Fogo de Chão starts new chapter under new ownership — Nation's Restaurant News(2023-10-01)
- Banks sold $550M leveraged loan for Bain's Fogo de Chão acquisition — Bloomberg(2023-09-21)
- Bain Capital buys Fogo de Chão in $1.1 billion deal — Reuters(2023-08-15)
- Fogo de Chão acquired by Bain Capital — Nation's Restaurant News(2023-08-15)
- Rhône Capital to acquire Fogo de Chão for $560M — Nation's Restaurant News(2018-02-22)
- Bain Capital finds unique qualities in consumer sector with Fogo de Chão and 1440 Foods(2024-01-31)