AUA Adds to Portfolio Trend With Tijuana Flats

The New York–based firm has invested in the 110-unit Tex-Mex restaurant chain, with plans to expand throughout the Southeast.

A New York–based private equity firm focused on the U.S. Hispanic market is betting that its acquisition of a Tex-Mex restaurant chain will cook up some strong returns.

AUA Private Equity Partners, a lower-middle-market firm, has invested in Tijuana Flats, a Florida-based chain with its own brand of hot sauces.

“Part of the strategy in our partnership with the owners at Tijuana Flats is to continue the incredible growth of the Tijuana Flats brand” says Steve Flyer, a partner at AUA who led the acquisition. “We think there’s an opportunity to take a local, Florida brand and expand it at a minimum to a regional concept.”

The chain, which was founded in Winter Park, Fla., in 1995, now boasts 110 units in six states and is part of a larger investment strategy that AUA managing partner Andy Unanue has put in place since founding the firm in 2009.

“Part of our investment strategy is looking at Hispanic-oriented companies, partly by virtue of Andy Unanue’s background – as former COO of his family’s business, Goya Foods”, says Flyer.  As COO of one of the most successful Hispanic food companies in the U.S., Andy obviously has tremendous experience with Hispanic-influenced foods and businesses.”

For his part, Flyer was an investor in the El Pollo Loco restaurant chain at his former firm and served on its board of directors.

AUA invests in businesses that generate anywhere between $5M and $40M in EBITDA, with average investments between $20M to $25M, and Flyer says Tijuana Flats falls in line with that average range.

The restaurant’s two original partners, Brian Wheeler and Camp Fitch, will remain with the company—something Flyer says was crucial to the deal.

“My hat is off to the two gentlemen who founded this brand,” he says. “They have tremendous loyalty from their communities and employees.”

The restaurant chain joins a portfolio of companies that are market leaders among Hispanic consumers, including Raymundo’s Food Group, Blue Star Media, Associated Food Holdings and Trufoods.

Flyer says part of what attracted the firm to Tijuana Flats was the culture and the customer experience – hospitality is a key driver to the chain’s success.  While undertaking due diligence, AUA spent time not only with senior management but with store managers, he says, and they were impressed with the company’s execution of providing customers a unique experience.”

“You have to have good, fresh products, and we do,” says Flyer. “But you also need to provide an experience for the guest so they feel welcome and important. The folks at Tijuana Flats continue to do this at every level of that organization, and it shows every time a customer returns again and again.”