Roark Capital Group, known for carbohydrate-heavy quick service chains like Cinnabon and Carvel, announced Friday it acquired the company behind the low-carb Atkins diet.
Atlanta-based Roark becomes the latest owner of Denver-based Atkins Nutritionals, which flew high during the carb-reducing rage of the 1990s and early 2000s, but fell to earth after the 2003 death of diet founder Dr. Robert Atkins.
Roark acquired Atkins Nutritionals for an undisclosed sum from North Castle Partners, which helped turn around the diet company following a 2005 bankruptcy restructuring.
Atkins Nutritionals rebounded during the past few years, fueled by a best-selling book and a revised portfolio of packaged foods. The diet company makes money off an array of products like nutrition bars, shakes and books, largely giving away its nutritional advice and recipes.
Ezra Field, managing director of Roark, said the private equity firm has eyed the diet sector for some time, and said Atkins is poised for growth.
Roark has experience in licensed and distributed foods, and Atkins is a strong brand in the weight loss world.
“It fits with our strengths,” Field said, stressing that the company is on solid footing. “The problems are well in the rearview mirror.”
The diet is a four-phase program that limits carb intake in the beginning, stressing protein and fiber. The plan, which gradually allows carbs back into the diet, has been decried by some critics as a diet of fatty foods like bacon and hamburgers.
The company says its diet and products are backed by science and are effective ways of safely dropping weight.
Roark owns nearly 20 businesses, including Moe’s Southwest Grill, McAlister's Deli and Batteries Plus. It also recently has expanded into the solid waste and recycling sectors.
Stuart Johnson, a mergers and acquisitions attorney with Barnes & Thornburg in Atlanta, said the deal makes sense for Roark. The firm has experience in product distribution and franchising.
“They’ve got a balance sheet and they’ve got to spend it and there are things in the market that make sense to them,” Johnson said.
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