(Bloomberg) -- Tropical Smoothie Café is attempting to raise $610 million in its first-ever securitization, just two months after Blackstone Inc. funds acquired the drinks-and-food chain.
The deal, structured as a whole-business transaction, is expected to price this week and will in part refinance debt, according to a person familiar with the matter who asked not to be identified because the information is private.
Barclays Plc, which is the structuring lead, and Tropical Smoothie didn’t immediately respond to a request for comment. Blackstone declined to comment.
Subway’s record $3.35 billion deal just over two months ago leads an 11-firm slate of whole-business transactions this year, totaling $7.6 billion. Franchise-oriented business like gyms and restaurants utilize the market for funding, and issuers can get favorable terms in exchange for giving up more control to investors.
The funds’ acquisition of Tropical Smoothie was valued at around $1.7 billion, according to a Kroll Bond Rating Agency pre-sale report for the securitization dated Monday.
The chain has more than 1,400 locations, all but one franchised, according to Kroll, up nearly 500 since December 2020. Blackstone said when the deal closed that it planned to accelerate Tropical Smoothie’s national expansion.
Revenue topped $1.3 billion for the year through March 2024 and same-store sales have climbed 12 consecutive years, Kroll’s report said.
Tropical Smoothie is entering a strong ABS market, where issuance is up 26% from a year earlier, according to data compiled by Bloomberg.
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