Exclusive-Flynn Group, world's largest franchisee, explores $5 billion-plus sale -sources

Reuters

Published Feb 08, 2024 02:19PM ET

Updated Feb 08, 2024 04:26PM ET

By Abigail Summerville

(Reuters) - Flynn Group, the world's largest franchisee operator of restaurants and fitness clubs, is exploring a majority stake sale that could value it at more than $5 billion, including debt, according to people familiar with the matter.

Flynn Group, which operates Applebees, Taco Bell, Panera Bread (NASDAQ:PNRA), Arby's, Pizza Hut, Wendy's (NASDAQ:WEN) and Planet Fitness (NYSE:PLNT) franchises, is working with Bank of America on a sale process, the sources said.

Flynn Group, which is based in San Francisco, generates over $450 million of annual earnings before interest, taxes, depreciation and amortization, according to the sources.

Private equity firms and sovereign wealth funds are among the suitors for the majority stake that is up for sale, added the sources, who requested anonymity because the matter is confidential.

Ontario Teachers' Pension Plan (OTPP) and private equity firm Main Post Partners, which are investors in Flynn Group, could sell part of their stakes and remain invested following a deal, according to the sources.

Flynn Group's management, who are also significant shareholders, may do the same, the sources added.

OTPP owns around a third of Flynn Group, Main Post owns slightly over a third, and Flynn management owns the rest, the sources said.

Representatives for Flynn Group, OTPP, Main Post and Bank of America declined to comment.