May 11 (Reuters) - Mexican restaurant chain Taco Bueno has hired North Point Advisors to advise on a sale of the company, which could be valued at as much as $175 million, according to peo ple fam iliar with the situation.
Taco Bueno’s owner Palladium Equity Partners, a private equity firm, has tried to shop the company two times in the past but was unsuccessful, ac cording to one of the sources, who spoke on condition of anonymity.
Palladium Equity Partners declined to comment through a spokesperson. North Point Advisors and Taco Bueno could not be reached for comment.
Founded in 1967, Taco Bueno has more than 190 restaurant locations throughout Texas, Oklahoma, Louisiana, Arkansas, Kansas, Missouri and New Mexico. Its competitors include Chipotle Mexican Grill and Taco Cabana, owned by Fiesta Restaurant Group Inc
Sales at the Farmers Branch, Texas-based company have s tagnated in recent years. Including both company-owned and franchised stores, Taco Bueno generated sales of roughly $206 million in 2010, compared with $201 million in 2009 and $207 million in 2008, according to Nation’s Restaurant News.
The chain has about $23 million to $25 million in earnings before interest, taxes, depreciation and amortization (EBITDA) - a measure of cash flow - according to a second source.
Taco Bueno might sell for 6 to 7 times EBITDA, said a third source.
Palladium acquired Taco Bueno’s parent company, TB Corp, in 2005 from private equity firm Jacobson Partners. Taco Bueno was previously owned by CKE Restaurants, the parent to chains like Hardee’s and Carl’s Jr.