Goldman Sachs investment fuels Zaxby’s expansion plans

The Goldman Sachs Merchant Banking Division is set to acquire a significant stake in fast-casual chicken chain Zaxby’s.

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(Zaxby’s)
(Zaxby’s)

The Goldman Sachs Merchant Banking Division is set to acquire a significant stake in fast-casual chicken chain Zaxby’s.

“Zaxby’s is a fantastic company with a founder-led culture, loyal customers and talented employees. We are excited to partner with the management team to provide long-term capital for their next phase of expansion,” said Nicole Agnew, managing director in the Goldman Sachs Merchant Banking Division. “We are confident we can grow the brand while remaining authentic to what people love about the restaurants.”

Sales at fast-casual and quick service restaurant brands specializing in chicken have soared in the last year and a half thanks to the chicken sandwich wars.

Plans to expand

The deal, which is expected to be finalized by the end of 2020, will accelerate the brand’s growth and expansion into new sales channels throughout the country.

Zaxby’s currently operates more than 900 restaurants in 17 southeast states. The chain, which generated more than $1.9 billion in U.S. systemwide sales in 2019, is best known for its chicken fingers, wings and signature sauces.

“I look forward to working with the team at Goldman Sachs to continue building the brand I founded 30 years ago in Statesboro, Georgia. This partnership symbolizes the strength of our Company and their involvement will accelerate our growth and expansion into a national brand,” said Zach McLeroy, Zaxby’s co-founder and CEO.

“I am excited to have a firm like Goldman Sachs joining the Zaxby’s family. This new partnership is a testament to what our employees and franchisees have helped us create thus far. Goldman Sachs’ knowledge and resources will help continue to build upon the strong foundation we have laid out,” Tony Townley, Zaxby’s co-founder added.

Townley plans to step away from the brand to focus on family, according to a company spokesperson.

Morgan Stanley & Co. LLC and Stephens Inc. served as financial advisors to Zaxby’s. King & Spalding LLP and Fortson, Bentley and Griffin, P.A. served as legal advisors to Zaxby’s. Weil, Gotshal & Manges LLP served as legal advisor and Goldman Sachs served as financial advisor to Goldman Sachs Merchant Banking.

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