Blackstone Acquires Tropical Smoothie Cafe for $2 Billion

Blackstone acquires Tropical Smoothie Cafe for $2B, aiming to accelerate the fast-casual chain's nationwide expansion and capitalize on the growing demand for healthy food options.

author-image
Ayesha Mumtaz
New Update
Blackstone Acquires Tropical Smoothie Cafe for $2 Billion

Blackstone Acquires Tropical Smoothie Cafe for $2 Billion

Blackstone, a leading private equity firm, has announced the acquisition of Tropical Smoothie Cafe, a fast-casual restaurant chain specializing in smoothies, wraps, and sandwiches, for approximately $2 billion. The deal marks Blackstone's latest investment in the food and beverage industry and is expected to accelerate Tropical Smoothie Cafe's nationwide expansion.

Founded in 1997 as a single location on a beach in Destin, Florida, Tropical Smoothie Cafe has grown into a nationally recognized brand with over 1,400 franchised locations across 44 states. The company reported a positive increase in same-store sales in the first quarter of 2024, primarily driven by the launch of new menu items such as tropic bowls.

Blackstone's acquisition of Tropical Smoothie Cafe is the first transaction from its most recent flagship private equity vehicle. The firm plans to invest in menu innovation, operations, and marketing to continue growing the brand. "Tropical Smoothie Cafe has built an impressive brand with a loyal customer following," said Peter Wallace, Senior Managing Director at Blackstone. "We look forward to working with the talented management team to further accelerate the company's growth."

Why this matters: The acquisition reflects a warming market for restaurant mergers and acquisitions, with buyers gravitating towards quality concepts. Blackstone's investment in Tropical Smoothie Cafe highlights the growing appeal of health-conscious food options and the potential for rapidly expanding franchise businesses to expand rapidly with the right backing.

Charles Watson, CEO of Tropical Smoothie Cafe, expressed excitement about the partnership with Blackstone, stating, "We are thrilled to partner with Blackstone to strengthen our brand and expand our footprint. Their experience in helping to grow leading franchisors will be invaluable as we continue to bring our healthy and flavorful food to more customers across the country."

The transaction was advised by Barclays and Simpson Thacher & Bartlett LLP for Blackstone, while Baird served as the lead financial advisor for Tropical Smoothie Cafe, with support from North Point and BofA Securities. Kirkland & Ellis LLP acted as legal counsel for Tropical Smoothie Cafe. The financial terms of the deal were not disclosed.

Key Takeaways

  • Blackstone acquires Tropical Smoothie Cafe for ~$2 billion to accelerate expansion.
  • Tropical Smoothie Cafe has over 1,400 franchised locations across 44 states.
  • Blackstone plans to invest in menu innovation, operations, and marketing to grow the brand.
  • The acquisition reflects a warming market for restaurant mergers and acquisitions.
  • Tropical Smoothie Cafe CEO is excited to partner with Blackstone to expand the business.