Au Bon Pain gets new ownership structure

A private equity firm has signed a deal to buy a majority stake in Au Bon Pain in a move that should help fuel the South Boston cafe chain's growth plans.

LNK Partners of White Plains, N.Y., and LNK affiliates plan to invest more than $100 million in equity in Au Bon Pain as part of a deal to acquire a controlling interest in the company.

''Au Bon Pain is poised for significant growth, building on the brand's 30 years of success,'' said Henry Nasella, a founding partner at LNK.

The deal, which is expected to close by the end of March, would buy out shares in Au Bon Pain owned by an investment group led by PNC Mezzanine Capital. The PNC group assisted with a management buyout of the company in 2005 from Compass Group, a global food service company from England.

Au Bon Pain's managers will sell some of their shares to LNK, and will retain some shares, Au Bon Pain CEO Sue Morelli said. No major management personnel changes are expected.

Compass Group, which kept a minority stake after the 2005 sale, will also continue to be a shareholder, as well as a strategic partner on some business deals.

Compass had owned the chain from 2000 to 2005, and had focused on remodeling the cafes, Morelli said. Since 2005, Au Bon Pain has been focused on growing the chain, which has 226 locations.

The chain opened six new corporate-owned locations in 2007, and 14 franchise locations. The chain also posted nearly $300 million in revenue last year, and saw sales at cafes that were open at least a year rise by 5 percent in November from the same month in 2006, Morelli said.

Morelli said Au Bon Pain will continue to open locations in its core markets in the Northeast, and will fill in some gaps between Chicago and the East Coast. Franchise operations in Thailand, Taiwan and South Korea are also poised for growth, and franchises will open soon in Tokyo, Dubai and Kuwait.

''We think there's enough opportunity in the markets that we're in now,'' Morelli said. ''Ultimately, we can and will open in new markets contiguous to where we are.''

Bob Goldin, an executive vice president of restaurant consultancy Technomic in Chicago, said he expects the new owners will look to step up the pace of Au Bon Pain's expansion.

''I think the new owners should be able to infuse some funds and some capital to allow them to expand more rapidly,'' Goldin said. ''It's fundamentally a solid concept that could (use) a step on the gas.''

Au Bon Pain employs about 3,500 people, including nearly 300 managers with an ownership stake in the company, Morelli said. The chain operates 121 company-owned stores, largely in the Northeast. Franchisees operate another 105 cafes spread among 20 states and overseas locations.

Jon Chesto may be reached at jchesto@ledger.com.

The Patriot Ledger