CAFE RIO acquired by FREEMAN SPOGLI
Context
Freeman Spogli & Co. acquired Cafe Rio, Inc. from KarpReilly LLC, taking a majority interest in the fast-casual Mexican restaurant chain while existing management retained significant equity. The transaction marked Freeman Spogli's entry into the growing fast-casual segment, with Cafe Rio's leadership team continuing to guide operations from Salt Lake City headquarters. This deal made strategic sense as Cafe Rio's scratch-made Mexican cuisine and loyal customer base aligned perfectly with Freeman Spogli's successful restaurant investments including El Pollo Loco and other consumer concepts. Coming after KarpReilly's tenure that grew Cafe Rio from 6 Utah locations to over 100 restaurants across 11 states, the timing positioned the chain for accelerated expansion using Freeman Spogli's restaurant scaling expertise. Management emphasized leveraging the new partner's experience to enter additional markets while maintaining the company's culture of food quality and service excellence. The transaction highlighted private equity rotation in fast-casual dining, where proven growth stories attract strategic buyers seeking platform expansion opportunities.
CAFE RIO, which reported an EBITDA margin of in 2016, is valued in this transaction at an EV/EBITDA multiple of , representing a to the average currently observed in the Retail & Consumer sector (11.0x).
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Target
Cafe Rio, Inc. is a fast-casual Mexican restaurant chain founded in 1997 and headquartered in Salt Lake City, Utah, United States. The company serves authentic dishes inspired by recipes from Northern Mexico's Rio Grande region, Southern Texas, and New Mexico, using only the freshest ingredients prepared from scratch daily. Menu highlights include customizable burritos, handmade tortillas, fresh salads, tacos, and other Mexican favorites featuring various proteins, house-made sauces, and traditional cooking methods. Cafe Rio operates, in 2017, over 100 company-owned restaurants across 11 states. Cafe Rio's business model focuses on company-owned operations rather than franchising to ensure quality control and consistency across locations. Revenue comes primarily from restaurant sales with a focus on lunch and dinner dayparts. The company has demonstrated strong financial performance through organic expansion and operational excellence.
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REFERENCES
Valuation range: EV 300M - 700M USD
Revenue range: 100M - 200M USD
EBITDA range: 10M - 30M USD
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Authors: This transaction was contributed by a verified mynth contributor and cross-checked against available transaction documents and official company communications.
Press release: view release
Target: cafe rio
Acquirer: freeman spogli