Minneapolis private equity partnership will buy Parasole restaurant group

A Minneapolis private equity firm is buying Parasole Restaurant Holdings, the 42-year-old restaurant group behind Manny’s Steakhouse and Chino Latino.

FS Funds, a private equity partnership, has a signed purchase agreement for the company, whose 14 full-service restaurants also include Salut Bar Americain, Pittsburgh Blue Steakhouse, The Good Earth, Burger Jones and Field Day. Kip Clayton, vice president of marketing for the Edina-headquartered restaurant group, said the privately held company was not intending to release a sales price.

“We’re excited because the fund that purchased us is local and they know us well,” Clayton said. “A 40-plus-year-old company gets a lot of tweaks and inquiries over the years, and we worked very hard to find a partner in this sale that was like-minded and had a similar point of view about culture.”

The principals of FS Funds own Original Pancake House locations in Edina, Eden Prairie, Burnsville and Roseville, according to Parasole’s announcement.  Attempts to reach them for comment were not immediately successful.

Parasole co-founder Phil Roberts will remain in his position as CEO after the sale goes through, Clayton said. Peter Mihajlov, who started the company with Roberts in 1977, will leave Parasole, as will Kevin Kuester, an investor who became a partner in the company in 2003.

“The major impetus, if you look at the company, is the founders are in their early 80s,” Clayton said. “Plus, if you look at the senior staff, most of us are in our mid-60s. So I think that was part of the thinking.”

Most of that senior staff plans to stay on after the sale, he added. In addition to Clayton, that includes Chief Financial Office Barb Marshall, Chief Operating Officer Donna Fahs and Chief Development Officer Alan Ackerberg.

Clayton predicted it would take several months to finalize the sale “because we’re a pretty complex beast with a lot of moving parts.” Each restaurant is a separate limited liability company, and restaurant leases and liquor licenses will have to be individually transferred to the new owners.

Parasole has about 1,100 employees at its restaurants in the Twin Cities and Rochester. Clayton said FS Funds doesn’t plan any immediate changes, adding that employees and guests should hardly notice the transition.

Clayton said negotiations with FS Funds lasted between 12 and 14 months. The goal from the beginning was to sell the restaurants as a group, rather than piecemeal, he said.

“We wanted to keep the band together, and that’s been part of the mantra from day one,” he said.

Roberts and Mihajlov began their restaurant partnership in 1977 with Muffuletta restaurant in St. Paul, which closed in 2017 after a four-decade run. Four years after opening Muffuletta they added Pronto Ristorante, a northern Italian-style restaurant in downtown Minneapolis. In 1985, they opened Figlio, their popular and long-running Uptown bistro.

Source:  Bizjournals.com/twincities