PE Perspectives/White Papers

4 investor strategies for restaurant deals this year

This article was first published by Restaurant Dive.

From private equity firms to special purpose acquisition corporations, all investor eyes will be on concepts that have thrived during the pandemic with strong potential to grow nationally.

NewSpring eyes concepts light on debt, high on value proposition

NewSpring developed a strategy to invest in multi-unit companies — both restaurant and non-restaurant and franchise and non-franchise operations — about a year ago, Satya Ponnuru, partner at NewSpring, said. The company considers investments in the lower end of the mid-market, or about less than $6 million or $7 million in EBITDA.

But while NewSpring was building up this investment arm, the pandemic pushed Ponnuru and his team to pause and reevaluate what it was looking at, Ponnuru said.

The core of what NewSpring considered didn’t change, though. The company continues to look at brands with compelling company value propositions and concepts that have proven, scalable unit economics, Ponnuru said. It also highly considers companies that can leverage and enhance technology, as well as companies with strong management teams, he said.


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