Peak Rock Capital is considering selling its portfolio company Shipley Do-Nuts, a donut company and coffee chain based in Houston, Texas, according to two people familiar with the matter.
North Point has been appointed to oversee the potential sale process, which is expected to launch later this year, the sources said.
Shipley Do-Nuts has an EBITDA of between $25 million and $30 million, the sources said, with one of the sources adding that its EBITDA multiple could be in the teens or 20s.
The company could primarily attract interest from sponsors, the sources said. One of the sources said a sponsor like Roark Capital, which invests in franchised restaurants, could be interested in the asset as an add-on acquisition to one of its portfolio companies.
Peak Rock acquired Shipley Do-Nuts in January 2021 for undisclosed terms. Since then, the company has continued to expand its physical stores and regional presence. The company currently has more than 360 stores in 12 states in the South and Midwest, compared to 300 stores in nine states at the time of the acquisition.
Peak Rock was raising money for its Peak Rock Capital Fund III when it acquired Shipley Do-Nuts in January 2021. The fund closed in April of the same year with $2 billion.
Shipley Do-Nuts, founded in 1936, is a fast-food chain that serves donuts, jam buns and beverages. Q3 2024 This is Shipley’s 15th consecutive quarter of positive sales, according to the company.
Peak Rock and North Point declined to comment. Shipley did not respond to a request for comment.
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