Sentinel Divests Border Foods | Private Equity | Middle Market | Buyouts

Standard Private Equity Dictionary

"Acquisition strategy" | Current products have no market
Standard Private Equity Dictionary

"Basically on plan" | Revenue shortfall of 25%
Standard Private Equity Dictionary

"Considerably ahead of plan" | Hit plan in one of the last three months
Standard Private Equity Dictionary

"Core business" | Obsolete product line
Standard Private Equity Dictionary

"Currently revising the budget" | Financial plan is total disaster
Standard Private Equity Dictionary

"Cyclical industry" | Posted a huge loss last year
Standard Private Equity Dictionary

"Entrepreneurial CEO" | Totally uncontrollable, bordering on maniacal
Standard Private Equity Dictionary

"Feeding frenzy" | At least one interested new customer
Standard Private Equity Dictionary

"Ingredients are there" | Given two years might find a workable strategy
Standard Private Equity Dictionary

"Investing heavily in R&D" | Trying desperately to catch the competition
Standard Private Equity Dictionary

"Limited downside" | It can't get much worse
Standard Private Equity Dictionary

"Long selling cycle" | Yet to find a customer who likes the product
Standard Private Equity Dictionary

"Major opportunity" | Last chance
Standard Private Equity Dictionary

"Niche strategy" | Small-time player
Standard Private Equity Dictionary

"On a manufacturing learning curve" | Can't make the product with positive margins
Standard Private Equity Dictionary

"Opportunistic investment strategy" | Absolutely no investment strategy
Standard Private Equity Dictionary

"Passive investor" | Phones yearly to see if company is still in business
Standard Private Equity Dictionary

"Possibility of slight shortfall" | Revenue shortfall of 50%
Standard Private Equity Dictionary

"Reposition the company" | No market for current products
Standard Private Equity Dictionary

"Rifle shot approach to a few investors" | You're the only potential investor left
Standard Private Equity Dictionary

"Somewhat below plan" | Revenue shortfall of 75%
Standard Private Equity Dictionary

"Strategic investor" | Investor will pay a preposterous valuation
Standard Private Equity Dictionary

"Too early to tell" | Results to date have been grim
Standard Private Equity Dictionary

"Turnaround opportunity" | Lost cause
Standard Private Equity Dictionary

"Unique" | No more than six competitors
Standard Private Equity Dictionary

"Upgrading the management team" | The organization is in complete disarray
Standard Private Equity Dictionary

"Value-added investor" | Generally comes to board meetings but spends most of the time on "emergency" phone calls
Standard Private Equity Dictionary

"Volume sensitive" | Massive fixed costs
Standard Private Equity Dictionary

"Well below plan" | An outright, unmitigated disaster
Standard Private Equity Dictionary

"Window of opportunity" | Without more money, the company is dead
Standard Private Equity Dictionary

"Work closely with the management" | Talk to them on the phone once a month
Standard Private Equity Dictionary

"Leading company in our industry" | Middle of the pack player
Standard Private Equity Dictionary

"Good partners" | Not currently in litigation

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Sentinel divests holdings in Border Foods in a transaction

Premier Taco Bell Franchisee in Minnesota

NEW YORK, January 3, 2000 - Sentinel Capital Partners, a leading private equity firm that invests in promising smaller middle market companies, today announced the sale of Border Foods, Inc., a premier franchisee in the Taco Bell system, in a recapitalization transaction valued at $58 million. The change positions Border Foods' management as the new majority owner. Sentinel sold its holdings after three years because virtually all of the investment's original objectives, which were expected to be met in five years, had been achieved. Since Sentinel's original investment, Border Foods has increased sales and profitability by more than 40% and 75%, respectively. According to executives involved with the transaction, Border Foods is now well positioned to grow its existing core Taco Bell business and its newly acquired KFC franchise.

"This marks the culmination of a terrific relationship with Sentinel," said Lee Engler, President of Border Foods. "Both parties did what they said they were going to do at the outset and are more than satisfied with the outcome."

"Lee and his team did an outstanding job. They are superb restaurant executives," observed David Lobel, Founder and Managing Partner of Sentinel. "They told us that their goal was to own the entire company," added John McCormack, Co-Founder and Senior Partner of Sentinel. "We are delighted to enable them to fulfill their dreams and are confident that they will continue to be highly successful."

Border Foods, located in Minneapolis, Minnesota, is one of the largest franchisees in the worldwide Taco Bell system. With approximately $5 billion in systemwide revenues and 6,800 restaurants, Taco Bell is the largest U.S. quick service restaurant chain specializing in Mexican food.

Taco Bell, a wholly-owned subsidiary of Tricon Global Restaurant, Inc., is the franchisor of the Taco Bell concept. Tricon is one of the world's largest operators and franchisors of QSR restaurants with more than 29,000 restaurants in 102 countries. Tricon is also the parent company of KFC and Pizza Hut. Tricon's restaurant brands generate annual system-wide sales of approximately $20 billion.