Checkers Drive-In Restaurants Inc, a drive-through hamburger chain that could be worth more than $300 million, is being put up for sale by its private equity owner, according to two sources with direct knowledge of the situation.
The company's backer, Wellspring Capital Management, has hired North Point Advisors and Harris Williams & Co to assist with the sale, the sources said.
Wellspring declined to comment. Checker's, North Point Advisors and Harris Williams could not be reached for comment.
Tampa, Florida-based Checkers, which operates more than 800 restaurants across the United States under the Checkers and Rally's names, generates earnings before interest, taxes, depreciation and amortization (EBITDA) in the mid-$30 million range, one of the sources said.
The would-be sale, which is currently in the management presentation stage with the company soliciting first round bids, is viewed as similar to the sale of Bojangle's Famous Chicken 'n Biscuits to private equity firm Advent International in 2011 for 9.5 times EBITDA.
Financial sponsors being targeted are similar to those who bid on the Bojangles deal, including Thomas H. Lee Partners, Advent and TA Associates, one of the sources said.
The private equity firms could not be reached for comment.
A wave of M&A has recently swept the restaurant sector after little consolidation within the past few years and with private equity firms looking to get out of investments they've held for upwards of five years.
Checkers is just one of several restaurant chains being shopped right now by their private equity backers. Houlihan's Restaurants and Taco Bueno are both in the market, sources have previously said. Einstein Noah Restaurant Group Inc BAGL.O announced in May that it was exploring strategic alternatives.
Recent restaurants deals that have been announced include Centerbridge's acquisition of Asian themed restaurant chain P.F. Chang's China Bistro Inc for $1.1 billion in May and Benihana Inc's $296 million sale to investment adviser Angelo Gordon & Co, also in May.
(Reporting by Luisa Beltran of peHub and Olivia Oran of Reuters; Editing by Steve Orlofsky)