Apollo exits Mexican fast-casual chain Qdoba

Qdoba, the Mexican fast-casual chain, reached an agreement to be acquired by PE firm Butterfly Equity from Apollo Global Management, Butterfly announced.

Why it's the BFD: Even without revealing the terms of the transaction, it's one of the more notable restaurant deals this year, given tepid M&A activity in the sector.

• In a sponsor-to-sponsor trade, the transaction indicates private equity still has a vested interest in the space.

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• The largest restaurant deal so far is Jack in the Box's acquisition of Del Taco for $585 million in March, according to PitchBook. (Jack in the Box sold Qdoba to Apollo back in 2017.)
• Other big ticket deals in the restaurant and entertainment segment include Dave & Buster's acquisition of Main Event Entertainment for $835 million.

Details: Butterfly will merge Qdoba with its portfolio company Modern Restaurant Concepts, which owns Modern Market Eatery and Lemonade.

• King Street Investment Capital is investing alongside Butterfly.

By the numbers: Qdoba has 750 locations in North America, 450 of which are franchised.

• When the deal closes, Modern Restaurant Concepts will have 800 locations, which means Qdoba will account for a lion's share.
• The parent company believes it has the opportunity to expand its concepts to 3,000 locations.

Flashback: Apollo acquired Qdoba from Jack in the Box for $305 million, a deal that was announced in late 2017 and closed the next year.

• Apollo launched a sale process for the fast-casual brand in late 2019, seeking a valuation of up to $550 million, Bloomberg reported.

Of note: While no valuation was given, Qdoba and Apollo enlisted a team of sell-side advisers, including Credit Suisse and Deutsche Bank on the finance side and Morgan, Lewis & Bockius on the legal.