Real Mex Restaurants Is Said to Hire Piper Jaffray, Seek Sale

(Bloomberg) -- Real Mex Restaurants Inc., the operator of Chevys Fresh Mex and El Torito that was taken over by creditors in a bankruptcy seven years ago, is looking to sell itself again as the casual-dining industry continues to lose customers.

The company has hired advisers from investment bank Piper Jaffray as it seeks prospective buyers, according to people with knowledge of the matter. A deal could ultimately involve selling the chain through another bankruptcy process, said the people, who asked not to be identified because the process isn’t public.

Modestly priced, dine-in restaurants are losing customers to faster-service brands such as Panera Bread. Another chain in the category, Bertucci’s Inc., filed for bankruptcy in April. Real Mex, which opened its first El Torito restaurant in 1954, is also facing a larger field of competitors as Mexican cuisine has become mainstream in the U.S.

The Cypress, California-based company’s other brands include Acapulco and Pink Taco. An affiliate of Sun Capital Partners, a private equity firm known for buying distressed companies, purchased Real Mex in 2006 for $359 million. Real Mex filed for bankruptcy in 2011, citing the U.S. recession, and a group of its lenders took over the following year.

A representative for Real Mex declined to comment on its plans, while a representative for Piper Jaffray didn’t respond to a request for comment.

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