News

Krystal sold to private investment firm

March 23, 2012

The Krystal Co. has been purchased by Argonne Capital Group, an Atlanta-based private investment firm, for an undisclosed amount.

According to the Chattanooga Times Free Press, the burger chain will continue to be headquartered in Chattanooga, Tenn.

The 80-year old burger chain last changed hands in 1997, when Port Royal Holdings bought the company out of bankruptcy. Under then-president Phil Sanford, the company expanded to more than 420 stores, but was forced to close some locations during the recession.

In 2011, Krystal finished the year with increased sales and increased per-transaction sales.

Krystal first announced it was seeking a buyer in August 2011. By October, CEO Fred Exum confirmed that Krystal was "halfway through the sale process," as the company closed some underperforming locations and built new ones.

Exum said that the company was looking to find "the right owner, one that will continue to uphold the qualities of the Krystal brand that have made it a Southern icon."

Michael Klump, founder and president of Argonne, said the firm sees "opportunity" with the acquisition and plans to continue opening new company-owned restaurants. The chain added 10 new units in the past 12 months.

"We have watched with great interest as Krystal has continued to develop quality products, offer outstanding customer service and maintain brand dominance through the recession," Klump said in a statement.

Argonne's portfolio includes more than 350 IHOP, Applebee's and Stevi B's Pizza restaurants, and has more than 10,000 employees nationwide. The company also develops homes and invests in commercial real estate.

The Krystal acquisition will double the number of restaurants managed by the group to 710, and will increase the number of workers to more than 16,000.

Krystal's new board will include Michael Klump and Karl Jaeger from Argonne, as well Stockton Croft, the firm's advisor. Harsha Agadi, former president and CEO of Church's Chicken, also will join the board.

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