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MOD Pizza Raises $160M and Sets Target for 1,000 Locations

May 21, 2019

SEATTLE--(BUSINESS WIRE)--May 21, 2019--

MOD Super Fast Pizza Holdings, LLC (“MOD Pizza”, “MOD” or the “Company”), the fastest growing restaurant chain in the United States for the past four years, 1 today announced a $160 million equity financing led by Clayton, Dubilier & Rice (“CD&R”), a private investment firm recognized for its operating capabilities and working with portfolio companies to execute profitable growth strategies. Ken Giuriceo, CD&R Partner, and Paul Pressler, CD&R Partner and former CEO of Gap Inc. and senior Disney executive, will both join the MOD Pizza board of directors. Current investor Fidelity Management & Research Company also participated in the round. The latest funding comes as MOD posted $398 million in system-wide sales and added 102 new locations in 2018. MOD has now raised approximately $339 million of equity to date.

With this additional capital, MOD plans to maintain its rapid growth across existing and new markets in the US and internationally. Currently, there are 433 MOD locations system-wide, and the Company expects to reach approximately 1,000 locations over the next five years, creating more than 14,000 new jobs. In addition to continued growth, MOD plans to enhance the experience it provides customers through investments in off-premise and digital capabilities, while continuing to look for ways to use its business as a platform to make a positive social impact.

“We are grateful to CD&R, Fidelity, PWP Growth Equity and all of our incredible shareholders for their support as we continue to write the story of MOD as the pioneer in fast casual pizza and a leader in using business as a force for good. Over the past 11 years, we have built MOD upon a conviction that we could build a best-in-class business by putting our people and the communities we serve first,” said Scott Svenson, co-founder and CEO, MOD Pizza. “This investment is further validation of our belief that profit and positive social impact can co-exist. We are incredibly energized by the opportunity to work with CD&R to scale the MOD brand, while continuing to build our people-first, purpose-driven culture.”

Added Ken Giuriceo, CD&R partner, “MOD has clearly proven that building a business around a meaningful and authentic purpose can align and inspire the team to produce incredible results. The company is poised to continue its rapid growth, and we are thrilled to join their talented team of industry veterans to further develop and strengthen the MOD business and brand.”

During 2018, MOD grew its footprint 34% by adding 102 locations system-wide, ending the year with a total of 404 locations. System-wide sales reached $398 million, a 45% year-over-year increase, while domestic system-wide same-store sales grew 3.1%. Company net revenue was $312 million, up 42% over 2017. MOD also contributed $1.8 million to causes supporting local communities and employees in need during 2018.

In addition to continued growth, MOD plans to accelerate initiatives to grow digital ordering channels, off-premise solutions, its loyalty program (MOD Rewards) and personalized marketing programs. With 100% growth in digital orders over the past year, MOD is committed to continuing to innovate to meet growing digital demand and to ensure customers have easier and more convenient access to the MOD experience.

MOD has always focused its social impact on what it does best – employing and feeding people. The Company has a long-standing commitment to creating a diverse and inclusive workforce by hiring and developing individuals who would otherwise face barriers to employment (including opportunity youth, those transitioning out of incarceration, homelessness, rehabilitation programs and foster care, and individuals with developmental/physical disabilities). In addition to its progressive employment practices, MOD is committed to tackling food insecurity in the communities it serves. In 2018, with the help of its franchisees, MOD funded, packed and distributed nearly half a million meals to food banks and backpack programs throughout the US, and expects to create an additional one million meals in 2019.

J.P. Morgan acted as sole placement agent to MOD in connection with the private placement.

Definitions:

The following definitions apply to these terms as used throughout this release:

  • The term “system-wide” refers to all of our domestic and international stores, including company-owned, franchised stores and stores operated by our U.K. joint venture, unless noted otherwise. All of our international stores are currently operated by the U.K. joint venture in the U.K.
  • Domestic system-wide same-store sales reflects the year over year change in sales for the comparable domestic system-wide store base in the US. A store becomes comparable after its 19 th period of operation.

ABOUT MOD PIZZA

MOD is a purpose-led, people focused brand, founded in Seattle in 2008 by entrepreneur husband and wife team Scott and Ally Svenson. MOD exists to serve people by Spreading MODness, using the platform of pizza to make a positive impact. MOD’s individual artisan-style pizzas and hand-tossed salads are made on demand using any combination of over 30 toppings, all for one incredible price. With 433 locations system-wide across 28 states and the United Kingdom, MOD is committed to creating not only a cool place to eat, but an inspired place to work. The company has been recognized as the number one mid-sized restaurant chain in the US in the October 2017 Fishbowl Buzz Brands Report, named as the most loved pizza brand by Foodable Network in its May 2017 Most Loved Brands Report, has been ranked as America’s fastest growing chain restaurant by Technomic for four straight years, earned a spot on the Inc.500 list, and was recognized by Fortune as one of the “20 Best Workplaces in Retail,” a “Best Workplace for Women,” a “Best Workplace for Millennials,” and a “Best Workplace for Diversity.” For more information, please visit www.modpizza.com or connect with the brand via Facebook, Twitter or Instagram.

ABOUT CLAYTON, DUBILIER & RICE

Founded in 1978, Clayton, Dubilier & Rice is a private investment firm. Since inception, CD&R has managed the investment of $28 billion in 85 companies representing a broad range of industries with an aggregate transaction value of more than $125 billion. CD&R has offices in New York and London. For more information, visit www.cdr-inc.com.

ABOUT PWP GROWTH EQUITY

PWP Growth Equity is the middle market private equity group of Perella Weinberg Partners Capital Management, managed by Chip Baird and David Ferguson. PWP Growth Equity manages private equity funds with aggregate commitments of $1.35 billion focused on growth-oriented, lower middle market companies, primarily in the United States, across the consumer, services, and industrial sectors. PWP Growth Equity seeks to partner with existing owners and management teams, providing both capital and experience in a tailored and flexible structure, to support the growth plans and vision for value creation. PWP Growth Equity’s current and former investments include: SkinSpirit, Quick Med Claims, The Real, 360training, Delphon Industries, Luna Grill, Hyphen Solutions, Black Bear Diner, MSA Security, MOD Pizza, YouFit Health Clubs, Western Windows and Build A Sign. For more information on PWP Growth Equity, please visit: www.pwpgrowthequity.com.

MOD, MOD Pizza, the MOD Shield, MOD Rewards and Spreading MODness are trademarks of MOD Super Fast Pizza, LLC.

1 Technomic, Top 500 Restaurant Report 2015-2018.

View source version on businesswire.com:https://www.businesswire.com/news/home/20190521005326/en/

CONTACT: Charlotte Wayte

charlotte.wayte@modpizza.com

KEYWORD: UNITED STATES NORTH AMERICA WASHINGTON

INDUSTRY KEYWORD: RESTAURANT/BAR PHILANTHROPY RETAIL FOOD/BEVERAGE OTHER PHILANTHROPY

SOURCE: MOD Super Fast Pizza Holdings, LLC

Copyright Business Wire 2019.

PUB: 05/21/2019 09:30 AM/DISC: 05/21/2019 09:30 AM

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