Bahrain-based Arcapita Bank has signed a definitive agreement for the sale of Church's Chicken fast food company to a an affiliate of Friedman Fleischer & Lowe (FFL), a San Francisco-based private equity firm.

While the transaction sum has not been disclosed, it is expected to close within 30 days, subject to normal closing conditions.

Arcapita's affiliates acquired Church's Chicken in December 2004.

In spite of the difficult market and hostile economic conditions of the last 18 months, the completion of this exit will generate an attractive return for Arcapita's investors of close to two times their original investment.

Church's Chicken is one of the world's largest quick-service chicken restaurant concepts, with over 1,600 outlets worldwide.

Under Arcapita's ownership, the company has increased margins, expanded the store base, and added new markets in the US, Latin America, the Gulf, the UK, Russia and India. I

t has also recorded earnings growth of almost 60 per cent and now generates over $1.2 billion of global system sales annually.

'Given the very constrained credit environment, as well as the sustained economic downturn, this announcement is a significant achievement for Arcapita and our investors,' said Arcapita chief executive officer Atif A Abdulmalik.

'It reflects the tremendous quality of the company we have built with management over the last four and a half years, and importantly, it will yield approximately a two times cash-on-cash return for our investors.'

'The US leveraged buyout market has suffered a dramatic slowdown as a result of the challenging conditions, and this is one of the very few significant transactions with leverage since August 2008,' Arcapita's US corporate investment group head Stockton Croft said.

'At the time of acquisition, we brought in a new, highly experienced management team.

'This team has successfully increased same store sales every year, improved the quality and number of stores in the US, and accelerated international expansion.

'Maintaining earnings growth through the last 12 months is clear testimony to the robust nature of the company's business.'

'FFL has a long history of successful consumer industry investments and the acquisition of Church's Chicken represents an opportunity to apply our sector expertise to enhance value of an outstanding quick service restaurant chain,' said FFL vice-chairman David L Lowe. – TradeArabia News Service