CiCi’s Pizza (“CiCi’s”) is a leading pizza restaurant company featuring an “all-you-can-eat” buffet format in the U.S.

www.cicis.com

Investment

C$52 million

Fund

ONCAP II

Period

June 2007 – August 2016

ONCAP Team

Michael Lay
Mark Gordon

Transaction Summary

ONCAP partnered with the Cici's management team to recapitalize the business.

 Business Description

CiCi’s Pizza (“CiCi’s”) is a leading pizza restaurant company featuring an “all-you-can-eat” buffet format in the U.S. operating through two main business units:

  • CiCi Enterprises LP: Consisting of 402 franchised and 39 corporate restaurants annually serving more than 57 million guests for approximately $5 per guest; and
  • JMC Distribution LP: Captive purchasing and distribution business with three distribution centers across the U.S. distributing ingredients and supplies to 100% of the system-wide restaurants as well as a handful of third-party customers.

Accomplishment and Outcome

Despite a challenging environment for the restaurant industry following the acquisition, CiCi’s preserved equity value as a result of its strong cash-flow profile. At the time of the sale of the Company, CiCi’s paid down over US$90 million of its original acquisition debt, and recorded 14 consecutive quarters of same-store-sales growth. The return to revenue and EBITDA growth is attributed to a new management team brought in since 2013, improved product quality, more effective marketing, improved franchisee relations and third-party distribution earnings.

In August 2016, the Arlon Group purchased the Company, generating a total of  approximately $90 million in proceeds for ONCAP, which represented a 1.7x gross multiple of capital invested in Canadian dollars.