By Joshua Burd
Blackstone is acquiring a majority stake in Jersey Mike’s Subs, reportedly for some $8 billion, in a move aimed at continuing the Manasquan-based sandwich chain’s rapid growth.
In a news release, the firms said Jersey Mike’s Founder and CEO Peter Cancro will maintain a significant equity stake and continue to lead the business that he has helmed for five decades and that began franchising units in 1987. It’s now a staple in retail properties across New Jersey and beyond, boasting more than 3,000 locations open and in development nationwide with a popular concept centered on freshly sliced and grilled sub sandwiches.
Blackstone, the private equity giant, said the deal is meant to help Jersey Mike’s accelerate its expansion across and beyond the U.S., as well as its continued investment in technology and digital transformation. Terms were not disclosed, but multiple outlets reported that the deal is valued at around $8 billion.
“We believe we are still in the early innings of Jersey Mike’s growth story and that Blackstone is the right partner to help us reach even greater heights,” Cancro said. “Blackstone has helped drive the success of some of the most iconic franchise businesses globally and we look forward to working with them to help make significant new investments going forward.”
According to the news release, Jersey Mike’s has been recognized as one of the fastest-growing fast-casual restaurant chains in America and ranked No. 2 on Entrepreneur’s 2024 Franchise 500. It’s now poised to become the latest Blackstone-owned franchisor, following in the footsteps of brands such as Hilton Hotels and SERVPRO, as well as the firm’s recent investments in Tropical Smoothie Cafe and 7Brew.
Private equity funds managed by Blackstone, led by the company’s most recent flagship private equity vehicle, are acquiring the majority ownership position in Jersey Mike’s. The firms expect to complete the deal in early 2025 subject to the satisfaction of certain closing conditions, including applicable regulatory approvals.
“Jersey Mike’s has grown for more than half a century by maintaining an unrelenting focus on quality (and delicious sandwiches) — consistently building on its loyal customer base as it has scaled nationwide,” said Peter Wallace, a senior managing director at Blackstone.
“Blackstone has deep experience helping accelerate the expansion of high-growth franchise businesses and this area is one of our highest-conviction investment themes. We are excited to partner with an entrepreneur of Peter’s caliber and the talented Jersey Mike’s team. Our capital and resources will help support key investments in growth and technology for the benefit of Jersey Mike’s customers and exceptional franchisees. I highly recommend the #13 Original Italian, Mike’s Way.”
The companies noted that Cancro began working at the original Mike’s Subs location in Point Pleasant, which was founded in 1956, at age 14. He acquired the location in 1975 at age 17 and began franchising units in 1987.
Guggenheim Securities and Morgan Stanley & Co. LLC are acting as financial advisers, while White & Case LLP served as legal counsel to Jersey Mike’s. Barclays and Bank of America are acting as financial advisers and Simpson Thacher & Bartlett LLP served as legal counsel to Blackstone.
