Philz Coffee, set to be acquired by private equity, teases 'pipeline of new store openings'
Philz Coffee, a California-based coffee chain, is set to be acquired by private equity firm Freeman Spogli, the companies announced Aug. 4.
The companies announced the acquisition in a news release, but the terms of the transaction were not made public. Philz CEO Mahesh Sadarangani confirmed to Paste BN that the deal closed as of Aug. 6.
Philz, which has 77 cafe locations across California and Chicago, said its entire existing corporate leadership will remain with the company through the acquisition.
Freeman Spogli has previously invested in other restaurant chains like First Watch and El Pollo Loco as well as companies like Savers and Petco, according to its website.
"From day one, Philz has been known for its distinct approach to coffee and the community it has cultivated around the brand," said Jacob Jaber, one of Philz Coffee's founders, in the release. "It was personally important to us to find a partner that fully appreciates and is firmly committed to our mission."
Is Philz Coffee closing stores, cutting jobs?
Philz Coffee said it is not planning to close any stores as a result of the acquisition.
"There are no plans to close stores, and in fact we have an exciting pipeline of new store openings planned over the next 24 months," the company said on its website.
The coffee chain also said it is not planning to cut any jobs.
"It is expected that benefits, pay, raises, hours, and promotions will continue as the company has operated historically," the company's website said.
However, in partnership with Freeman Spogli, Philz Coffee said on its website that it will be paying all its employees a "thank you bonus" as a result of the transaction.
What we know about private equity firm's acquisition of Philz Coffee
Despite the new deal, Philz Coffee, which was established in 2003, said on its website that it has been owned by private equity firms for the past 13 years.
"We chose to partner with Freeman Spogli due to their commitment to preserving our rich culture, investing in our team, and supporting our constant focus on quality," the company said.
Freeman Spogli is planning to support Philz Coffee's growth "in both existing and new markets," the coffee company said.
"This new partnership will help accelerate that journey," Philz Coffee said.
Philz Coffee CEO Mahesh Sadarangani is slated to receive "compensation and proceeds in connection with the transaction," but the company said and he will be "reinvesting 100% of his after-tax proceeds from the transaction back into the company."
This story has been updated with additional information.
Melina Khan is a national trending reporter for Paste BN. She can be reached at melina.khan@usatoday.com.