Lou Malnati’s sells a slice of the pie! The Chicago Tribune reported Wednesday that BDT Capital Partners, an investment firm headed by former Goldman Sachs Vice Chairman Byron Trott, has bought an ownership stake in the popular pizza chain.
Lou Malnati’s Pizza, which has 46 Chicago-area locations and recently expanded to Phoenix, is taking on a low-key but high-powered investor to help with additional expansion.
“We held off going out of state for 45 years, because we’re a Chicago company,” said owner Marc Malnati. “Opening in Phoenix was a pretty high investment. We put millions of dollars up to build out a new store, train a crew that had never made pizza before, shipped some of our people out to Phoenix. And when we opened in May, we experienced three-hour waits, people in line in 95-degree heat and excited about it. It was an incredible honeymoon.
“But we realized that to create a big enough footprint to thrive out there, we need to add six or eight stores,” Malnati said.
“And I realized we’d want to do this again and again, in the next dozen years ago, in a handful of other cities. And instead of my brother, Rick, and I taking all the risk when we move — when you move into another city it winds up being 10 times the risk — we thought it would be great to have a partner to shoulder some of that risk.”
Malnati wouldn’t say how large BDT’s stake is, except to affirm that he and brother Rick are the two largest individual shareholders.
BDT was a good fit, Malnati said.
“Byron Trott is committed to family-owned, closely held companies,” he said. “This (partnership) will create opportunities to have counsel and advice as we calculate our plans for the future. That’s the big idea here.”
Don’t expect a slew of nationwide Malnati pizzerias any time soon, Malnati said.
“We don’t plant to grow any more aggressively than we have been for the last five years,” he said. “We’ve generally opened one new restaurant a year, and maybe a few carryout locations. I believe this business is all about the people who work in the company, and those people have to have a certain level of experience. We work hard to develop that, but it takes time. So we move slowly.”