Blackstone Agrees to Acquire Tropical Smoothie Cafe for Nearly $2 Billion

by Hayden Spiess

Atlanta and New York City — Blackstone has entered into a definitive merger agreement to acquire Tropical Smoothie Cafe, a franchiser of fast-casual restaurants, from Levine Leichtman Capital Partners. The deal values the Atlanta-based smoothie chain at around $2 billion, including debt, according to The Wall Street Journal.

Tropical Smoothie Cafe began as a single location in Destin, Florida, in 1997. The chain has grown to more than 1,400 locations in 44 states today. The company opened more than 175 locations in 2023, 70 percent of which were opened by existing franchisees. In addition to smoothies, the company sells menu items like sandwiches, salads and bowls.

In the first quarter of this year, Tropical Smoothie Cafe completed 64 franchise agreements and opened 39 new stores. Its newest airport location opened at Hartsfield-Jackson Atlanta International Airport. The launch of new menu items such as Tropic Bowls helped drive overall sales, which were above the industry average in the first quarter, according to the company.

“Tropical Smoothie Cafe has had an impressive growth trajectory consistently building on its loyal customer base as it has scaled nationwide,” says Peter Wallace, a senior managing director in Blackstone’s private equity business. “Blackstone has deep experience helping accelerate the expansion of leading franchise businesses as one of our highest-conviction investment areas.”

Previous franchiser acquisitions for Blackstone include Hilton Hotels and Servpro, a cleaning and emergency restoration services franchiser. According to The Wall Street Journal, Blackstone’s 2007 bet on Hilton Hotels earned it $14 billion, making it the most profitable private equity investment in real estate ever.

The newspaper also reports that the acquisition of Tropical Smoothie Cafe is a sign that Blackstone is starting to invest again in private equity after mostly sitting out 2023, along with the rest of the industry.

New York City-based Blackstone maintains more than $1 trillion in assets under management.

— Kristin Harlow

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