Roark Capital Group Portfolio and Growth Strategies

Roark Capital Group is a private equity firm that has made a significant impact in the industry with its unique growth strategies. They have a diverse portfolio of companies across various sectors.

One notable aspect of Roark Capital's approach is their focus on investing in companies with strong brands and growth potential. They have a proven track record of helping their portfolio companies expand their market share and increase profitability.

Roark Capital's portfolio includes companies like Inspire Brands, which operates a diverse range of brands including Arby's, Buffalo Wild Wings, and Sonic Drive-In.

Roark Capital Group is an American private equity firm with nearly $11.0 billion in equity capital. They're based in Atlanta and have a significant presence in the private equity market.

Roark focuses on investments in consumer and business service companies, with a specialization in franchised and multi-location business models in various sectors. Their largest sector is food and restaurants, which encompasses investments in well-known brands such as Arby's and Dunkin'.

With $33 billion in assets under management, Roark has a substantial portfolio of companies across multiple industries, including food, restaurants, specialty retail, health, wellness, and beauty.

Roark Capital was founded by Neal Aronson, a graduate of Lehigh University. He started his career in New York as an investment banker.

Aronson co-founded U.S. Franchise Systems in 1995, an Atlanta-based hotel franchisor that began with one brand and 22 hotels in nine states. He and his co-founder sold the company in 2000 for roughly $100 million.

An old mentor from his investment banking days inspired Aronson to start Roark Capital. His mentor's influence led him to draw inspiration from the fictional novel The Fountainhead.

Aronson's all-time favorite character, Howard Roark, from The Fountainhead, was the inspiration behind the firm's name. Howard Roark's traits, such as conviction and passion, are the qualities that Aronson admires.

Roark Capital's 12 core values are based on the traits of Howard Roark, including commitment, integrity, collaboration, and accountability.

Roark Capital Group is an Atlanta-based private equity firm with a significant presence in the market. They have $33 billion in assets under management.

Roark focuses on investments in consumer and business service companies, particularly those with franchised and multi-location business models. This includes the restaurant, specialty retail, consumer and business services, and health, wellness and beauty sectors.

A win-win-win approach is at the core of Roark's philosophy, aiming to create a harmonious environment where all stakeholders, including customers, employees, franchisees, and shareholders, benefit from their partnerships. This approach has led to successful collaborations with entrepreneurs and executives who share the same vision.

Since its inception, affiliates of Roark have acquired 95 franchise/multi-location brands, generating approximately $54 billion in system revenues from 64,000 locations across 50 states and 89 countries.

Roark Capital Group is known for taking a long-term approach to their investments, with a time horizon of 3-5 years to resell brands to bigger funds after optimizing costs and increasing profitability.

Their patience is evident in the fact that they had only sold three companies in 13 years, with Aronson stating that they're not big believers in shortcuts, and it takes time to build a sustainable company.

Roark has an obligation to their investors to provide liquidity, but they prioritize growing their investments and maintaining long time horizons to align incentives with their partner franchisors.

Since 2014, they've made some divestitures, including taking Wingstop public in 2015, selling millions of shares to the public, their first divestiture of a restaurant company.

Roark's strategy is focused on acquiring more brands, with minimal sales expected in the near future, making them an exciting company to keep an eye on.

Roark Capital Group has a diverse investment portfolio, with a focus on franchising and restaurants.

The firm's most common sectors for investment are franchising, which accounts for 27% of its investments, and restaurants, which make up 20%.

In the last 3 years, Roark Capital Group has acquired 2 companies.

Roark Capital Group has invested in 21 US states and 2 different countries.

Its largest disclosed acquisition occurred in 2020, when it acquired The ServiceMaster for $1.6B.

The firm's most common exit type is trade sale, which accounts for 39% of its exits.

In the last 3 years, Roark Capital Group has exited 1 company.

Roark Capital Group's most common investment types include secondary buyout and buyout (LBO, MBO, MBI), which make up 47% and 27% of its investments, respectively.

Roark Capital's first acquisition was Carvel in 2001 for $26 million.

The acquisition of Carvel served as the basis for FOCUS Brands, a majority-owned Roark affiliate that operates famous franchises like Jamba, Auntie Anne's, and Cinnabon.

FOCUS Brands isn't even the biggest holding of Roark, but it's a significant platform within the larger umbrella.

Inspire Brands, another majority-owned affiliate of Roark, was formed in 2018 when Arby's acquired Buffalo Wild Wings for $2.9 billion.

This acquisition aimed to create a suite of brands that span multiple occasions, price points, and interest levels, making Roark's portfolio more appealing to customers.

Roark's portfolio now includes Dunkin', Jimmy Johns, Sonic, Buffalo Wild Wings, Arby's, and Baskin Robbins, among others.

Outside of Inspire Brands and FOCUS Brands, Roark has invested in platforms like Driven Brands, a leading automotive franchise holding company, and Self Esteem Brands, the owner of Anytime Fitness, The Bar Method, and more.

Roark has also made one-off investments in OrangeTheory, Massage Envy, and Culver's, with the latter being the only outside investment Culver's has taken.

As of 2021, Roark Capital has raised over $18 billion in equity capital and has a team of over 100 employees.

Roark Capital Group has a strong track record of deal exits, with a notable example being the sale of Dunkin' Donuts to Inspire Brands in 2019 for $11.3 billion.

This exit was a significant milestone for Roark, demonstrating their ability to identify and capitalize on high-growth opportunities.

Roark's investment in Dunkin' Donuts was made in 2009, and under their ownership, the company expanded its global presence and improved its operational efficiency.

The sale of Dunkin' Donuts was a testament to Roark's strategic approach to investing and their ability to create value in their portfolio companies.

Roark's deal variety is impressive, having invested in companies across all industries. They've taken Dunkin' private in an $11.3 billion deal, the largest franchise transaction ever.

This level of deal variety is a testament to their ability to adapt to different market conditions. They've also taken Driven Brands public via an IPO at a valuation of $700 million, retaining ~70% ownership.

Roark's willingness to invest in any industry, at any stage, is a key factor in their success. They've acquired Mathnasium, an education franchise, in a 9-figure transaction that was fully done in the private markets.

Their expertise in franchises is a unifying force behind all their investments, allowing them to navigate complex transactions with ease.

In total, 18 exits were recorded in the data.

Secondary sales and trade sales were the most common exit types, making up 56% of all exits combined.

Here's a breakdown of the deal types: