Bain to Buy Steakhouse Chain Fogo de Chão for $1.1 Billion

Bain Capital is set to acquire Brazilian steakhouse chain Fogo de Chão.

Current owner Rhone Capital announced the sale in a news release Tuesday (Aug. 15), saying Bain would accelerate the chain’s growth and expansion.

Terms of the deal were not released, but report by Reuters, which first noted the acquisition, said the sale valued Fogo de Chão at $1.1 billion.

That report also said Rhone had considered taking Fogo de Chão public once more, going as far as to submit paperwork for an initial public offering (IPO) in 2021. But when the IPO market began to wane, Rhone considered a sale, the sources said.

Reuters also points out that the sale is happening during a period of increased restaurant sector dealmaking. For example, Benihana has reportedly been working with advisors to put itself up for sale. And as noted here, Subway has been exploring the possibility of a sale since February.

Meanwhile, rising food prices could be chasing diners away from eateries, as recent PYMNTS research has found.

Data in PYMNTS’ “Connected Dining” report shows that 58% of consumers made restaurant purchases in June, a 9 percentage point drop from May — and the steepest decline in monthly purchase percentages since last November.

Additional data from the same report noted that consumers both pulled back on how often they visited restaurants in June and how much they spent when doing so. In June, the average spend per visit averaged $24.30 per person, a nearly $2 drop from the previous month and the lowest spending amount for 2023 so far.

“The main driver behind these decreased visits may well be rising menu prices,” PYMNTS wrote Wednesday (Aug. 16).

“After all, food inflation may be slowing, but it hasn’t stopped or reversed,” PYMNTS reported. “Higher prices from restaurants’ suppliers often get passed down to consumers, and the need to cover also-increasing restaurant overhead may lead restaurants to make these markups even higher.”

All the same, some quick-service restaurants are beefing up their drive-through and carryout options, taking advantage of the convenience of their meals as on-site numbers dip.

Past PYMNTS research has shown that 48% of consumers who dine out at least three times a week found a growing gap between a meal’s costs and their satisfaction with it. That led 58% of those consumers to scale back their tips, which could lead to higher staff turnover and leave diners even more dissatisfied.