NEW YORK - Blackstone (NYSE:BX) has agreed to purchase Tropical Smoothie Cafe, a prominent fast casual restaurant franchisor, from Levine Leichtman Capital Partners, marking the first deal from Blackstone's latest flagship private equity fund. The acquisition aims to further Tropical Smoothie Cafe's rapid growth by enhancing its menu, operations, and marketing efforts.
Tropical Smoothie Cafe, which started as a single beachfront location in 1997, now boasts over 1,400 outlets across 44 states. The brand is recognized for its smoothies and food offerings and has seen substantial expansion, with more than 175 new cafes launched in 2023, 70% of which were by current franchisees. The company has been ranked first in the Smoothie/Juice Category by Entrepreneur Franchisee 500 for four consecutive years.
Peter Wallace, Senior Managing Director at Blackstone, commented on the company's successful growth and Blackstone's role in supporting the brand's continued expansion and innovation. Charles Watson, CEO of Tropical Smoothie Cafe, expressed excitement about the brand's future growth with Blackstone's global resources.
While the financial terms of the deal have not been disclosed, Blackstone was advised by Barclays and Simpson Thacher & Bartlett LLP, and Tropical Smoothie Cafe was advised by Baird, North Point, BofA Securities, and Kirkland & Ellis LLP.
Blackstone is the world's largest alternative asset manager, with over $1 trillion in assets under management across a variety of investment vehicles. Tropical Smoothie Cafe is known for its mission to Inspire Better®, which includes a focus on better-for-you food and smoothies and a commitment to community improvement.
InvestingPro Insights
As Blackstone (NYSE:BX) embarks on its new venture with the acquisition of Tropical Smoothie Cafe, investors are closely monitoring the firm's financial health and future prospects. According to the latest data from InvestingPro, Blackstone boasts a robust market capitalization of $146.66 billion, reflecting its significant presence in the investment world. The company's revenue growth has been particularly impressive, with a 129.73% increase over the last twelve months as of Q1 2024 and an even more remarkable quarterly revenue growth of 173.57% in Q1 2024.
InvestingPro Tips highlight that Blackstone is expected to see net income growth this year, which aligns with the company's strategy of expanding its portfolio and increasing profitability. Additionally, the firm has consistently paid dividends for 18 consecutive years, indicating a stable return to shareholders amidst its growth endeavors. Despite a high Price / Book multiple of 20.99 as of Q1 2024, suggesting a premium on the company's assets, Blackstone has demonstrated a strong return over the last five years, which may reassure investors looking for long-term value.
For those seeking deeper insights and additional InvestingPro Tips, Blackstone has 14 analysts who have recently revised their earnings estimates downwards for the upcoming period. This could be an important consideration for investors as they evaluate the company's short-term earnings potential. With a P/E ratio of 43.54 and an adjusted P/E ratio of 40.84 for the last twelve months as of Q1 2024, the company trades at a low P/E ratio relative to near-term earnings growth, potentially indicating an attractive investment opportunity.
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