Leonard Green takes majority stake in hip, funky Velvet Taco chain

LGP investment in Velvet Taco should accelerate taco chain’s already rapid growth

Leonard Green & Partners, L.P. (LGP) took a majority stake in Velvet Taco from private equity firm L Catterton and FB Society, which was formerly Front Burner Restaurants. The LGP investment in Velvet Taco, for an undisclosed sum, will continue Velvet Taco’s path to a national presence.

Velvet Taco moves to next stage of growth

In 2016, L Catterton began its investment in the creative, funky fast-casual brand. It will now retain a significant minority stake in the concept, as will FB Society.

FB Society launched Velvet Taco in 2011. The Dallas-based taco chain presents a premium menu, with scratch-made preparations. There are over 20 taco selections, side dishes and red velvet cake. Velvet Taco will have grown to over 40 stores by the end of 2022.

“Since we began our partnership with L Catterton, we have continued to raise the bar higher and elevate the one-of-a-kind experience that our guests have come to expect when they choose to dine with Velvet Taco,” said Clay Dover, president and chief executive Velvet Taco. “L Catterton has been a tremendous partner through this chapter of our growth, and we are excited to have them remain a part of the Velvet Taco family going forward. In addition, we are thrilled to welcome LGP as a new partner as we embark on this next phase of Velvet Taco’s national expansion.”

LGP to provide big boost in national expansion

Evan Hershberg, partner at LGP, commented, “Velvet Taco has established itself as a leader in the fast-casual restaurant category with its innovative, culinary-driven concept and we believe the company is extremely well positioned for growth and expansion. We are excited to build on the Company’s significant momentum and strengthen its brand leadership across the US.”

LGP manages more than $50B in assets. The private equity firm uses traditional buyouts, going-private transactions, recapitalizations, growth equity, and selective public equity, and debt positions. In fact, Los Angeles-based LGP has invested in more than 100 companies since its founding.

Chris Roberts, partner in L Catterton’s Growth Fund, added. “We are excited to welcome LGP to the family and look forward to supporting Clay and the Velvet Taco team as they bring their unique concept to more and more guests across the country.”

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Arlington Capital Advisors served as exclusive financial advisor to Velvet Taco. Finn Dixon & Herling LLP served as legal advisor to Velvet Taco and L Catterton.

Moreover, North Point had the role of financial advisor to LGP. Latham & Watkins LLP served as legal advisor to LGP on the transaction.

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