Boston Market Sold
The agreement to sell the 630-restaurant chain, which specializes in roasted chicken and potatoes, to private-equity firm Sun Capital Partners was expected. McDonald's acknowledged in January that it was studying its strategic options.
And though Boston Market is deemed only marginally profitable, it may bode well that Sun Capital Partners is an experienced buyer with other restaurant chains in its portfolio, including Bruegger's, Fazoli's, Souper!Salad! and Sweet Tomatoes.
"It makes no sense for McDonald's to keep it," said analyst John Glass, of CIBC World Markets in Boston. He noted that McDonald's bought Boston Market in 2000 thinking it would learn something about the dinner business, but it now is focusing on trying to bolster its fast-food enterprise.
Jody Berger, a spokeswoman for Boston Market, said the Golden headquarters has 220 employees and that there are 20 restaurants in Colorado.
"The transaction has not closed, so it would be inappropriate to discuss the purchase at this time," Berger said.
Glass estimated Boston Market, which has 14,000 employees nationwide, has about $600 million of annual sales but an operating profit of less than $5 million. The number of Boston Market restaurants has declined from 750 since McDonald's bought the 28-state chain in May 2000 for $176 million.
In a regulatory filing Monday, McDonald's listed Boston Market as having assets of $180 million and liabilities of just $89.1 million. It said it expected the transaction to be completed in the third quarter.
Boston Market, originally called Boston Chicken, was founded in 1985 and enjoyed stellar success initially. But it ran into a cash crunch and filed for Chapter 11 bankruptcy reorganization in 1998. Many believed the company, which had 1,143 restaurants at its peak, grew too quickly.
McDonald's acquired Boston Market in 2000 as part of what would become a failed effort to diversify its business.
While the number of restaurants has declined, Boston Market has tried to increase its performance through home delivery and a prepared-food business in supermarkets. As of January, the company's food was in 1,300 supermarkets.
From the August 13, 2007, Prepared Foods e-Flash
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