Chase, Prism Buy Control of Restaurant Firm in Leveraged Deal

Chase Manhattan Corp.'s venture capital unit has teamed up with Prism Capital, a Chicago-based buyout group, to acquire the C.A. Muer Corp. in a leveraged recapitalization.

Chase Capital Partners provided the majority of the equity capital and also provided all of the mezzanine financing for the acquisition of the restaurant operator.

Chase Manhattan also served as syndicate agent for the senior debt portion of the loan, while BankBoston Corp. was the administrative agent. Terms of the acquisition, which was announced June 19 when it was completed, were not disclosed.

"As the majority equity sponsor, you bring all of your capabilities to bear," said Robert Greene, a principal at Chase Capital Partners, explaining how Chase's experience in the restaurant-hospitality industry made the bank a natural choice for doing the entire deal.

Some of Chase Capital Partners' investments include an equity financing of Leean Chin, an operator of Asian-food restaurants, and a management buyout of Lyons Restaurants, a regional family-style restaurant chain.

Robert Finkel, president of Prism Capital, who has long been a fan of the C.A. Muer restaurants, brought the deal to Chase.

Mr. Greene explained that Prism needed a partner with "deeper pockets" for the acquisition.

"Chase and Bob Greene brought both experience in restaurant investing and an existing relationship that I trusted," said Mr. Finkel, noting that he had a personal relationship with members of Chase Capital Partners.

Chase Capital Partners and Prism now own roughly three-quarters of C.A. Muer and are on the board of the company. Muer management, which has been left intact, owns the remainder of the company.

"Both Chase's and Prism's philosophy is that management is everything and C.A. Muer's management is fabulous," Mr. Finkel said.

The management team had to work hard to keep up the reputation of the company's former owner, Charles Muer, who died while out at sea during a 1993 storm off the Florida coast.

The company operates 18 fresh-food restaurants in Michigan, Ohio, Pennsylvania, and Florida, including the Grand Concourse in Pittsburgh and Chuck Muer's Key West. u

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