Target Overview

Tumble 22 Holdings, LLC, known as Tumble 22, is a full-service hot chicken restaurant chain renowned for its unique, bar-centric dining experience. The company has five locations across Texas and is inspired by the famous Nashville hot chicken trend. Tumble 22 simplifies its menu by offering all-natural, Texas-raised chicken that is seasoned with a proprietary blend. The founders, successful restaurateurs Guy Villavaso and Larry Foles, have extensive experience in the restaurant industry, having established a variety of unique dining concepts under the Guy + Larry Restaurants brand, which includes Z’Tejas Southwestern Grille, Eddie V’s Prime Seafood, Hopdoddy, and Roaring Fork.

Moving forward, Guy + Larry Restaurants will retain an ownership position in Tumble 22 as Doug Thompson, the former COO of Texas Roadhouse, steps in as the new CEO post-acquisition. This collaborative leadership aims to drive the next phase of growth for Tumble 22.

Industry Overview in Texas

The restaurant industry in Texas is vibrant and diverse, characterized by a rich tapestry of culinary influences from different cultures, which reflects the state’s multicultural demographic. The sector saw considerable growth over the past few years, buoyed by a robust economy and growing population, leading to increased consumer spending on dining out.

The rise of fast-casual dining has created opportunities for innovative concepts like Tumble 22, where quality and customer experience are prioritized. Hot chicken has emerged as a prominent trend, gaining popularity for its flavorful and unique offerings. This trend aligns perfectly with the Texas market, where there’s a strong appetite for new dining experiences.

Moreover, Texas has robust support for both independent restaurants and larger chains, creating an environment conducive to growth. With culinary entrepreneurs being welcomed in various communities, the landscape for new restaurant brands is favorable.

Despite potential challenges posed by inflation and supply chain issues, the restaurant industry in Texas is poised for recovery and expansion, especially for distinctive concepts that cater to changing consumer preferences. Tumble 22, with its focus on quality and a unique food offering, stands to capitalize on this favorable market environment.

Rationale Behind the Deal

The acquisition of Tumble 22 by BRS & Co. and Rosser Capital Partners aims to leverage the company’s strong market position and growth potential in the emerging hot chicken space. Both firms recognize the trend toward gourmet offerings in the fast-casual dining sector and the growing consumer demand for unique culinary experiences.

This partnership is strategically aimed at accelerating Tumble 22’s expansion into new markets while enhancing brand visibility. With the involvement of experienced operators like Doug Thompson, the deal brings forth operational expertise that could drive significant growth.

Investor Overview

BRS & Co. is a prominent New York-based private equity firm, focusing on investments in lower-middle-market consumer goods and services, with an impressive track record of placing over $1.2 billion in capital across more than 50 portfolio companies. With expertise acquired since its inception in 1996, BRS has a clear vision for scaling successful restaurant concepts.

Rosser Capital Partners, located in Greenwich, CT, specializes in the lower middle market and seeks to invest in emerging brands, particularly in the restaurant and consumer sectors. With a history of 27 successful transactions totaling over $2.5 billion, Rosser's partnership with experienced management teams demonstrates their commitment to long-term growth and value creation.

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Overall, this investment in Tumble 22 presents a promising opportunity for both BRS & Co. and Rosser Capital Partners. The combination of a differentiated concept and a committed leadership team under Doug Thompson indicates a potential for sustained growth in a favorable market climate.

The hot chicken trend is gaining momentum, especially in a vibrant market like Texas, making Tumble 22 a timely investment. The restaurant's focus on quality and unique branding sets it apart from competitors, which can lead to a strong customer base and brand loyalty.

Moreover, with the restaurant industry's eventual recovery from recent challenges, Tumble 22 is well-positioned to expand its footprint. The partnership with two seasoned investors will provide not just the capital necessary for growth but also the operational expertise that can help navigate challenges and seize opportunities in the evolving market landscape.

In conclusion, this transaction is expected to enhance Tumble 22's visibility and performance in an increasingly competitive industry, promising a significant return on investment for the involved private equity firms.

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