An investment group led by Catterton Partners -- a Greenwich, Conn.-based $2.5 billion private equity firm -- has acquired a controlling interest in Broomfield-based Noodles & Company, officials announced Tuesday.
Financial terms of the transaction were not disclosed.
A majority stake of Noodles may be in the hands of an investment group, but the 120-person Broomfield headquarters should not be affected, said Kevin Reddy, who is staying on with the company and continuing in his roles of chief executive officer, president and chairman.
Members of Noodles' management team are among the investors, officials said.
"Actually, there should be no changes," Reddy said. "We are clearly a Colorado company, and that's where our roots are. ... Our offices are here and our operations are here, and they're going to stay here."
Officials for Catterton declined to comment Tuesday.
Noodles' operations have been based in Broomfield since 2006, when the company moved from its hometown of Boulder. Since its founding in 1995, Noodles has expanded its fast-casual noodle restaurant chain across the United States and now operates 255 locations in 18 states.
While the economic downturn took a bite out of the restaurant industry as a whole, Noodles remained relatively unscathed the past couple of years, Reddy said. Noodles scaled back on annual restaurant openings to the low double-digits, but the company's revenue growth remained strong, he said.
"We were prudent, but we were not cautious," he said.
Noodles posted $192.7 million in revenue for 2009, according to figures the company provided to Inc. for the magazine's rankings of the nation's fastest-growing private firms. Noodles' sales last year grew 13 percent from 2008 and 65 percent from 2006, according to Inc., which ranks companies based on the three-year revenue growth rate.
Noodles came in at No. 3,115 on this year's "Inc. 5000" list.
Reddy lauded Catterton's track record, which has included investments in companies such as Odwalla, Baja Fresh Mexican Grill, Outback Steakhouse and Restoration Hardware.
"We did not have to make this decision; it's one we chose to make," he said. "They are very savvy, sophisticated consumer investors and their interest in Noodles & Company was because of the success that we had and the team that we built."
If a company is growing and performing well when it is acquired, it's not expected that wholesale changes should take place, said Ron Paul, founder of Technomic Inc., a Chicago-based restaurant research and consulting firm.
Noodles has grown to become one of the stronger players in the fast-casual sector, which is the fastest-growing sub-segment of limited-services restaurants, Paul said. Catterton's experience in that sector -- through its investment in P.F. Chang's and the Asian chain's fast-casual Pei Wei concept -- should bode well for Noodles, which has found success in broadening its menu by including sandwiches, he said.
What should result from the acquisition is a very active board of directors, who most likely will convey to management to "ratchet it up and ... grow faster," Paul said.
In 2011, Noodles expects to open 35 or more restaurants, Reddy said.