09/2017MajorityLBO

Freeman Spogli takes majority stake in Cafe Rio

UNITED STATES Hospitality & Leisure / Hospitality / Restaurants / Chains EV $300–700M

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 [members only] in 2016, is valued in this transaction at an EV/EBITDA multiple of 10x–18x.

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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.

Ent. Value

$300–700M

Equity Value

[members only]

Multiples

EV / Revenue

1x–3x

EV / EBITDA

10x–18x

EV / EBIT

[members only]

Historical Financials (USD)

Year

Rev

EBITDA

EBIT

2016

2015

Other operations with Freeman Spogli

Other operations with Freeman Spogli
Date	Acquirer	Target	Country	Sector
08/2025	FREEMAN SPOGLI	PHILZ COFFEE	UNITED STATES	Restaurants / Chains
08/2022	FREEMAN SPOGLI	EVERVET PARTNERS	UNITED STATES	Vet Clinics

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05/2017	BLUEGEM CAPITAL PARTNERS	BIG FERNAND	FRANCE	Restaurants / Chains
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04/2017	BLUEGEM CAPITAL PARTNERS	GRUPO RESTAURACIÓN LATERAL	SPAIN	Restaurants / Chains
03/2017	OAK HILL CAPITAL	CHECKERS DRIVE-IN RESTAURANTS	UNITED STATES	Restaurants / Chains
02/2017	ACCOR HOTELS	TRAVEL KEYS	UNITED STATES	Travel Agencies
12/2016	ICG	PARK HOLIDAYS	UNITED KINGDOM	Hospitality
10/2016	GENERAL ATLANTIC / VALEDO PARTNERS	JOE & THE JUICE	DENMARK	Restaurants / Chains

REFERENCES

Valuation range: EV $300–700M

Revenue range: $100–200M

EBITDA range: $10–30M

EV/Revenue range: 1x - 3x

EV/EBITDA range: 10x - 18x

Note: This page provides detailed data on a private equity M&A transaction. Detailed and exact financial metrics for the acquisition of Cafe Rio by Freeman Spogli are reserved for mynth community members. Register for free to unlock full data.

Authors: This transaction was contributed by a verified mynth contributor and cross-checked against available transaction documents and official company communications.

Target: cafe rio

FAQ

What transaction does this page cover?

This page covers the acquisition of a majority stake in Cafe Rio, an American company specialised in Hospitality, by Freeman Spogli in 2017, structured as a leveraged buyout (LBO).

How was the acquisition of Cafe Rio by Freeman Spogli valued, and what multiples were paid?

mynth displays the transaction’s enterprise value within the $300–700M band, its EV/EBITDA multiple within the 10x - 18x range, and its EV/revenue multiple within the 1x - 3x range. Exact figures are available to members.

What were Cafe Rio’s revenue and EBITDA at the time of the deal?

At the time of the transaction, Cafe Rio generated annual revenue estimated in the $100–200M range and EBITDA in the $10–30M bracket (FY 2016). Detailed financial figures are available to members.

What sources support the information on this transaction?

Information on this transaction is sourced from the official corporate announcement published by the parties, corroborated by a private document shared by the community and verified by the mynth team to ensure the accuracy of the shared information.

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