Brazos Partners and Cheddars Inc.哈佛商学院finance案例.pdf

9-806-069 R E V : J U N E 1 1 , 2 0 0 7 F E L D A H A R D Y M O N J O S H L E R N E R A N N L E A M O N Brazos Partners and Cheddar’s Inc. One September day in 2004, Randall Fojtasek,1 one of the founders of Dallas-based Brazos Private Equity Partners, looked around the bright airy conference room on the firm’s 17th floor offices when it came time for him to update the firm on Cheddar’s, a recent restaurant deal. “We closed the deal 10 months ago,” he said, “and the company is doing tremendously well. It’s doing so well, in fact, that management wants to increase its ownership. How do you feel about selling them more shares? And how should we price them?” Brazos Private Equity Partners was a middle-market leveraged buyout (LBO) group, founded in 1999 by Fojtasek, Jeff Fronterhouse [HBS 91] and Patrick McGee. It had access to a total of $450 million in capital: $250 million raised from such organizations as Aetna, Mellon Ventures, First Union, New York Common Retirement, Fleet Boston, Morgan Stanley Dean Witter, and University of North Carolina, and $200 million in potential co-investments from certain of its limited partners. The firm had just embarked on raising its second fund targeted at $350 million. Brazos focused on buyouts of companies valued in the lower end of the middle market between $50 million and $250 million, with demonstrable cash flow and good management located throughout the U.S., but with a particular emphasis on Texas and the Southwest, a region surprisingly underserved by LBO firms.2 The Cheddar’s transaction represented an iconic Brazos deal in all