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Chicago Tribune
11-04-2025
- Business
- Chicago Tribune
Trying to find its footing, Portillo's takes breakfast for a test run
Ice cream for breakfast? In Chicago, it's more like an Italian Beef. Oak Brook-based hot dog giant Portillo's is trying out a breakfast menu for the first time in its 62 years, the company announced Friday. The trial menu — which will be available daily at five Chicago-area restaurants starting April 15 — comes as the homegrown chain has struggled, at times, to find its footing amidst ambitious national expansion plans. Other than the Italian beef, the company's breakfast offerings are comparatively traditional, with more subtle nods to the company's heritage. A Polish sausage, egg and cheese and a pepper, egg and cheese both come with Giardiniera sauce. Also on tap is coffee courtesy of Metropolis, including a chocolate cake iced coffee inspired by the Portillo's chocolate cake shake. A chocolate cake doughnut, topped with Portillo's chocolate cake frosting, was borne of a collaboration with Stan's Donuts. Founded in a Villa Park parking lot in 1963, Portillo's was family-owned until 2014, when founder Dick Portillo sold the company to Boston-based private equity firm Berkshire Partners. Berkshire, in turn, took the hot dog empire public in 2021. Since then, Portillo's has announced ambitious plans to grow itself from a local chain to a truly national one, with plans to add hundreds of restaurants to its current fleet of more than 90 outposts over the next two decades. But the company has struggled to find its footing at times, facing investor activism, labor disputes and complaints from some patrons that the food isn't quite as good as it used to be. Its stock price, which hit a high of more than $50 shortly after its IPO, closed around $11 on Thursday. David Henkes, senior principal at Chicago-based food service research firm Technomic, said he isn't surprised that Portillo's would try out breakfast. 'It's all in search of growth right now,' said Henkes, speaking before the details of Portillo's dayside offerings became available. Breakfast will be available at the company's 520 W. Taylor St. restaurant in Chicago as well as one location each in suburban Elmhurst, Tinley Park, Shorewood and Niles. Breakfast will be served at least through the summer, though the trial could expand to other restaurants or into the fall. Breakfast hours will be from 6:30 a.m. to 10:30 a.m. 'Chicago has been asking for Portillo's breakfast for years, and we're thrilled to deliver our unique take on morning classics,' the company's vice president of strategy and culinary, Garrett Kern, said in a statement. For $7.99, customers can get a meal deal that comes with a breakfast sandwich, hash brown bites and a small coffee. Individual breakfast sandwiches, including a bacon, egg and cheese on a croissant, go from $4.99 to $5.29. Chocolate cake doughnuts will run you $2.79 apiece and $24.99 for a dozen. The breakfast move comes after the company's activist investor, Engaged Capital, launched a proxy fight by nominating two independent candidates to the company's board last month. At the time, Portillo's said in a statement that it 'values the perspectives of all of its shareholders' and had 'held numerous meetings with representatives of Engaged Capital to better understand their views and recommendations.' Sources familiar with conversations between Portillo's and Engaged suggested the activist thought offering breakfast could help drive in-store traffic, provided the company executes the attempt well. Portillo's revenue increased 4.5% in 2024, the company said in a fourth-quarter earnings release earlier this year. But that growth primarily came from new restaurant openings — same-store sales, which Engaged hopes to boost, declined 0.6% during the same period. Portillo's will announce its first quarter earnings at the beginning of May.
Chicago Tribune
03-03-2025
- Business
- Chicago Tribune
Activist investor gets tough on Portillo's
Chicago's hometown hot dog giant Portillo's is in the midst of an ambitious national expansion, and now a proxy fight may be brewing in its boardroom. Activist investor Engaged Capital, which took a nearly 10% stake in the Oak Brook-based company last year, said Monday that it has nominated two independent candidates to the company's board. Engaged said it was 'forced' to resort to the public nominations of former Wingstop CEO Charlie Morrison and marketing executive Nicole Portwood after months of private discussions around adding Morrison to the board didn't go anywhere. 'We remain ready and willing to reach a constructive resolution that spares all stakeholders an election contest,' Engaged said in a news release Monday. Portillo's is in the midst of an ambitious national expansion plan, with a goal to grow its fleet of just under 100 restaurants by hundreds over the next two decades. The company, which has been opening restaurants in Texas, Arizona and elsewhere, hopes to transform itself from a mostly regional chain to a truly national one, betting that Italian beef sandwiches and Chicago-style hot dogs will have wide appeal outside the Midwest. But the company has struggled with its stock valuation, which despite an approximately 50% jump since the start of the year is still down more than 60% since it was taken public by Boston-based private equity firm Berkshire Partners in 2021. Representatives for Portillo's did not immediately return a request for comment Monday morning. Engaged has maintained it thinks the company can succeed, but only if it makes changes to how it does business. Engaged, which previously led an activist campaign at Shake Shack, has pushed Portillo's to open smaller stores, for instance. The activist, which called the company's marketing practices 'ineffective' in the Monday news release, thinks Portillo's needs to increase its brand awareness outside the Chicago area, perhaps by opening in high-visibility locations, such as airports, people familiar with the matter told the Tribune last year. Portillo's has previously shown willingness to listen to Engaged, which now owns about 8% of the company. Last month, Portillo's announced it was adding Chipotle executive Jack Hartung to its board after being introduced to him by Engaged. Still, Engaged said Monday that Portillo's still needs to 'refine its approach to new unit development, modernize restaurant operations and related technology, and deploy targeted marketing investments to increase awareness and drive traffic.' Portillo's revenue increased 4.5% in 2024, the company said in fourth-quarter earnings release last week. But that growth primarily came from new restaurant openings. Same-store sales declined 0.6% during the same period. When Engaged announced it had taken a stake in the company last summer, people familiar with the matter said conversations between the parties were constructive, and that a leadership change was not on the table. For the time being, Engaged is not focused on making management changes at Portillo's, people familiar with the matter said. Portillo's, which was founded in a Villa Park parking lot in 1963, was family-owned until it was acquired by Berkshire about a decade ago.
Chicago Tribune
01-03-2025
- Business
- Chicago Tribune
Aurora-based Old Second set to buy Evergreen Bank Group
The Aurora-based Old Second Bancorp is set to buy the Oak Brook-based Bancorp Financial, which owns Evergreen Bank Group, for $197 million in cash and stocks, the two companies announced on Friday. The merger agreement was unanimously approved by the boards of directors of both companies and is expected to close in the third quarter of 2025, according to a joint news release from both companies. James Eccher, who is the chairman, president and CEO of Old Second Bancorp, said in the news release that the merger will 'diversify our revenue streams, enhance our management depth and provide a continuing opportunity to drive long-term stockholder value. 'Most importantly, we believe it enhances our competitive position in Chicago and increases the financial flexibility to continue to build the best bank possible for our customers and communities,' Eccher said. Once the two companies are combined, Old Second will have around $7 billion in assets, $6 billion in deposits and $5 billion in loans, which company officials said in the release will make it the second largest community bank under $10 billion in assets in the Chicago market. The combined company is set to have 56 bank branches across the Chicago region, the news release said. The acquisition will also expand Old Second into new markets through Evergreen Bank Group's powersports loans, according to the news release. FreedomRoad Financial and Performance Finance are both divisions of Evergreen Bank Group. 'By joining forces with Old Second, we are combining our strengths and shared values to create a better bank, offering enhanced services and opportunities for our employees, customers, key partnerships and the communities we serve,' Darin Campbell, chairman of Bancorp Financial, said in the news release. 'Together, we are poised to make an even greater impact and continue our legacy of excellence in banking.' The merged company is expected to have a diverse asset base, get improved returns and have opportunities for growth, company officials said in the news release. According to Eccher, the merger will also mean 'significantly less volatility and a stronger earnings profile in all rate environments.' The two banks' cultures are 'highly compatible with a shared commitment to serving clients that will benefit all constituents,' and Old Second is 'extremely excited to welcome Darin and his team into our management team,' Eccher said in the release. Bancorp Financial stockholders are expected to receive 2.5814 shares of Old Second common stock and $15.93 in cash for each share of Bancorp Financial's common stock, according to the news release. Company officials said in the release that, based on the $18.08 per share closing price of Old Second common stock on Feb. 24, the implied purchase price is $62.60 per Bancorp Financial common share, so the total transaction value is roughly $197 million.
Yahoo
27-02-2025
- Business
- Yahoo
Old Second boosts Chicago-area footprint in $197M Evergreen deal
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. Aurora, Illinois-based Old Second Bank will acquire Evergreen Bank in a $197 million deal set to create the second-largest community bank in the Chicago area, the banks said Tuesday. Adding Oak Brook-based Evergreen will give Old Second an extra $1.45 billion in assets and boost its footprint with three more branches in Cook and DuPage counties. But the real differentiator may be the opportunity to expand into powersports lending, where Evergreen has built two brands with national reach. The banks expect the deal to close in the third quarter of 2025. The Evergreen deal marks Old Second's second expansion in the past six months. The Aurora-based bank announced in August it would buy five Chicago-area branches from Muncie, Indiana-based First Merchants Bank. Investors in Evergreen's parent company, Bancorp Financial, will receive 2.5814 shares of Old Second common stock and $15.93 in cash for each Bancorp Financial share they own. Based on Old Second's $18.08 stock price at market close Monday, that comes out to roughly $197 million in a deal that is 75% stock and 25% cash, the banks said. 'We believe the combination will diversify our revenue streams, enhance our management depth and provide a continuing opportunity to drive long-term stockholder value,' Old Second CEO James Eccher said in a statement Tuesday. 'Most importantly, we believe it enhances our competitive position in Chicago and increases the financial flexibility to continue to build the best bank possible for our customers and communities." In its release, Old Second indicated that Bancorp Financial Chair Darin Campbell would join the combined entity's management, but it did not specify in what role. Campbell is also CEO and president of Evergreen. 'I could not be more proud of the team, the bank we have built together, and the positive impact we've made in the western suburbs of Chicago and the neighborhoods surrounding our oldest branch in Evergreen Park,' Campbell said in a statement. Campbell called out Evergreen's powersports lending divisions specifically – and Eccher echoed that, saying the deal allows Old Second to add 'meaningful consumer lending capabilities that we have long lacked.' 'We believe the combined income statement offers significantly less volatility and a stronger earnings profile in all rate environments,' Eccher said. After the transaction closes, the combined entity is expected to count roughly $7.1 billion in assets, $6 billion in deposits and $5.2 billion in loans and have a 56-branch footprint. The Chicago area has proven a fruitful draw for deals in recent times. Credit unions, in three successive years, have targeted some of the Windy City region's community banks. Michigan State University Federal Credit Union agreed in 2023 to buy McHenry Savings Bank. Lombard, Illinois-based Credit Union 1 agreed in 2022 to buy Gurnee-based NorthSide Community Bank. Iowa-based GreenState Credit Union dipped into the Chicago market twice in 2021 – first, agreeing to buy Oak Brook-based Oxford Bank & Trust, then later purchasing Midwest Community Bank and its subsidiary, Blueleaf Lending. But Chicago can be a jumping-off point, too. Rosemont, Illinois-based Wintrust, which owns a network of 16 community banks, expanded into Michigan for the first time last year, acquiring Macatawa Bank in a deal worth $510.3 million. And Chicago-area banks have stood to gain when competitors retreat from the market, as when First Merchants exited Illinois retail lending last year. The First Merchants deal is hardly Old Second's first turn at expanding by acquisition. The bank agreed in 2021 to buy Lombard-based West Suburban Bank in a transaction worth roughly $297 million.
