Mubadala Capital acquires second-largest US Taco Bell chain

K-MAC currently operates more than 300 quick-service restaurants in the country

Mubadala Capital, a subsidiary of Abu Dhabi's sovereign wealth fund, has acquired K-MAC Enterprises for an undisclosed amount. Courtesy Mubadala

Mubadala Capital, the asset management subsidiary of Abu Dhabi’s sovereign fund Mubadala Investment Company, has acquired K-MAC Enterprises, the second-largest Taco Bell franchisee in the US, as it expands its food and beverage sector investment portfolio.

Mubadala Capital bought the business from Lee Equity Partners Opportunities Fund in partnership with the existing management team of K-MAC, Mubadala said. It did not give the financial details of the transaction.

The acquisition of the Mexican quick-service restaurant chain is in line with the company’s goal of unlocking growth opportunities within Mubadala Capital’s F&B portfolio, it said.

“The management team at K-MAC are among the best operators we have come across as an organisation and we could not be happier to partner with them to drive K-MAC’s next phase of growth,” Adib Martin Mattar, head of private equity at Mubadala Capital, said.

“They have built an exceptional business with a 40-year track record of innovation alongside the Taco Bell brand as well as industry-leading operating performance that we are collectively looking to leverage across new concepts and formats to better serve each of their key demographics.”

Goldman Sachs advised Mubadala Capital on the transaction, while Bank of America and North Point advised the sellers.

Founded in 1964, K-MAC has expanded through a combination of new store openings and strategic acquisitions. It operates more than 300 Taco Bell restaurants, primarily in the Midwestern and Southern US states.

The K-MAC management expertise is “perfectly suited to capitalise on value creation opportunities that can be found within our existing portfolio of consumer and food services assets as well as our global network”, Mr Mattar said.

Mubadala Capital has significant experience in the food and beverage space, having invested approximately $1.8 billion over the past seven years in the sector.

In August, Mubadala Capital closed its $1.6bn third private equity fund that will focus on investing in sectors including media, sports, consumer and food services across North America and Europe.

The MIC Capital Partners III fund exceeded its target after securing commitments from a number of global institutional investors, including global pension funds, government institutions, family offices and private equity investors, it said at the time.

Last year, Mubadala Capital led a $700 million investment round into Reef Technology, a US-based start-up platform enabling growth of the North American on-demand economy, underpinned by food delivery with a portfolio that includes a number of quick-service restaurants in the US.