Mark Hauser’s Hauser Private Equity Returns On Notable Investments: CAVA and Dominion
Mark Hauser
Nationally relevant news stories frequently carry financial significance as well. Recently, Mark Hauser’s Hauser Private Equity returned significant capital to its investors from two headlining investments, the CAVA IPO (via fund partner Revolution) and the Staple Street Group’s settlement in the Dominion Voting Systems Lawsuit. Below, we’ll highlight the significance of both events:
The Long-Awaited Cava IPO
On June 15, 2023, Cava, a popular Mediterranean fast-casual restaurant chain, has announced its intention to go public with an initial public offering (IPO). The company has filed the necessary paperwork with the U.S. Securities and Exchange Commission (SEC), indicating its plans to offer shares of its stock to the public.
Known for its fresh and customizable menu inspired by Mediterranean cuisine, Cava has gained a loyal customer base since its establishment in 2011. With over 100 locations across the United States, the chain has been expanding rapidly, capitalizing on the growing trend of healthier and more diverse dining options.
The Significance of Cava’s IPO
Cava’s IPO is a significant move for the company, as it seeks to raise funds to support its ongoing growth and expansion efforts. The exact details of the IPO, including the number of shares to be offered and the expected pricing range, have not been disclosed yet.
The company’s decision to go public comes at a time when the restaurant industry is recovering from the impacts of the COVID-19 pandemic. Despite the challenges faced by the industry, Cava managed to adapt and find success through its digital ordering platforms, takeout options, and delivery services.
The IPO will likely provide Cava with additional capital to invest in its operations, expand its footprint, and further enhance its digital capabilities. The funds raised can also be utilized to fuel innovation in menu offerings and improve customer experience, ensuring its continued growth and competitiveness in the market.
Cava’s IPO announcement reflects the company’s confidence in its brand and its ability to navigate the evolving landscape of the restaurant industry. Investors will closely monitor the progress of the IPO and assess the potential for future returns as the company embarks on its journey as a publicly traded entity. For Hauser Private Equity, this underlying investment speaks to HPE’s commitment to the unwavering potential of the hospitality industry.
The “Secret Sauce” Behind Cava’s Successful Growth
While many factors contributed to Cava’s IPO success, the secret ingredient can be attributed to its ability to stand apart from the competition through its unique brand positioning and emphasis on customer experience. According to investment experts, including Hauser Private Equity’s co-managing partner, Mark Hauser, here are the key elements that played a pivotal role:
Differentiated Concept
Cava carved a niche for itself in the crowded fast-casual market by offering a distinct concept that combines healthy Mediterranean cuisine with a customizable menu. This differentiation helped Cava stand out and attract a loyal customer base.
Culinary Excellence
The restaurant chain’s dedication to culinary excellence, with a focus on quality ingredients, elevated its offerings beyond the standard fast-casual fare. Cava’s commitment to sourcing fresh and flavorful ingredients resonated with health-conscious consumers seeking a delicious and nutritious dining experience.
Strong Brand Identity
Cava built a strong brand identity that connected with its target audience. The company’s commitment to community, sustainability, and supporting local farmers and suppliers resonated with consumers who value ethically sourced food and environmentally conscious practices.
Expansion Strategy
Cava’s strategic approach to expansion played a crucial role in its IPO success. The company balanced controlled growth with maintaining consistency and quality across its locations. This demonstrated a disciplined approach to scaling the business and inspired confidence among investors.
Tech Integration
While Cava is a traditional restaurant concept, it leveraged technology to enhance the customer experience. The company introduced a mobile app and online ordering platform, enabling customers to customize their meals, skip the line, and have a seamless dining experience.
The Dominion Voting Systems Lawsuit
On April 18, 2023, Staple Street Capital Group LLC was the beneficiary of Fox Corporation’s $787.5 million settlement of the Dominion Voting Systems’ lawsuit.
Staple Street is the majority owner of this well-known voting machine operator that had sued Fox Corporation for defamation. As would be expected, Staple Street provided substantial support to Dominion during the lawsuit resolution process.
Dominion Voting Systems’ $787.5 million settlement is approximately half of the $1.6 billion damages the voting systems operator sought from the lawsuit. Staple Street and Dominion representatives did not comment on the amount Dominion will receive after payment of legal expenses and taxes.
The lawsuit settlement funds were accompanied by a statement from Fox News, known as the Fox Corporation’s cable channel. Fox News acknowledged a court ruling that the channel had broadcast false claims that Dominion machines facilitated voting fraud in the 2020 United States elections.
The Staple Street-Dominion Voting Systems Connection
In 2018, New York City-based Staple Street paid $38.3 million to receive a 76.2% ownership stake in Dominion Voting Systems. At the time of purchase, Dominion Voting Systems was valued at $80 million.
Per a Fox Corporation court filing, Dominion Voting Systems had a $226 million valuation during the run-up to the 2020 elections. Fox cited undisclosed exhibits when arriving at this figure.
Dominion Purchase Transaction Logistics
To complete the Dominion purchase transaction, Staple Street accessed a $265 million private equity fund. Respected data services firm Pitchbook noted that fund investors included Travelers Insurance, the University of Arizona’s endowment, and Hauser Private Equity. The latter is a well-known fund-of-funds manager headquartered in Cincinnati, OH.
Mark Hauser, Hauser Private Equity’s managing partner, acknowledged the lawsuit’s positive outcome. “We are very pleased with the outcome and think that Staple Street has handled the situation very well on behalf of their investors. We’ve had a relationship with Staple Street since 2014 and think highly of their management team,” Mark Hauser emphasized.
About Staple Street
Staple Street Capital Group LLC has been integrated into the financial services industry for over a decade. In 2009, former Carlyle Group, Inc. executive Stephen Owens co-founded the company with Cerberus Capital Management’s Hootan Yaghoobzadeh.
Staple Street has historically invested in middle market businesses, with a goal of adding value via partnerships with the firms’ management. In 2023, Staple Street had $900 million in managed assets per the company’s website.
The company holds investments in highly diverse sectors such as healthcare, financial services, and chemicals. Previous Staple Street investments included Six Flags Entertainment Corporation along with Cyberlink ASP Technology, Inc., a recognized information technology services firm.
Staple Street’s 6 Key Investment Practices
When preparing to engage in an investment, Staple Street Capital Group LLC adheres to six foundational practices. This investment framework applies across all sectors and businesses, and it is designed to promote a positive outcome for both companies.
Mutually Beneficial Management Partnerships
Staple Street regards its management teams as key to successful outcomes. To achieve predetermined goals, the company provides managers with the needed strategic and financial assistance to enable optimal results. Mutual financial incentives help to motivate management teams toward goal realization.
Partnerships That Promote Honesty and Transparency
To cultivate long-term business relationships, both parties must engage with honesty and transparency. Staple Street holds these values high and seeks partners that also embrace them. Where possible, the company seeks opportunities to engage in long-term, mutually beneficial collaborations.
Provision of Diverse Resources for Managers’ Success
A robust suite of resources enables Staple Street’s management teams to achieve growth objectives. The company maintains a broad network of successful operations executives who possess targeted functional or industry knowledge. These highly skilled advisers serve as management resources and Board of Directors members at managed firms.
Focus on Investments During Strategic Opportunities
Identifying companies that demonstrate value creation potential is key. Staple Street seeks out businesses that present operational or strategic opportunities to drive value. Specifically, the firm wants to partner with companies that desire to harness untapped market potential.
Businesses that want to enter (or depart) certain markets, reposition specific lines of business, or make strategic acquisitions may be good candidates. Firms that demonstrate a willingness to make growth-oriented changes in other areas are also potential partners.
Successful Navigation of Complex Scenarios
Companies engaged in a change cycle, or those in challenging situations, often represent good investment candidates. Staple Street works with due diligence experts who move swiftly and efficiently to realize preset goals. The company also has the ability to implement tailored investment frameworks that meet multiple stakeholders’ needs.
Fast Execution of Every Transaction
Staple Street maintains a “flat” organizational framework in which the key decision-makers are integral to the completion of every transaction. In many cases, the company can fund its investments with no third-party debt financing instruments.
About Mark Hauser and Hauser Private Equity
A well-structured financial services firm offers a range of services for a specific market segment. The company’s top-tier management will ideally have demonstrated industry expertise along with a focus on the firm’s core mission.
About Mark Hauser
Mark Hauser is Hauser Private Equity’s Founder and Co-Managing Partner. Based in Cincinnati, OH, and Los Angeles, he is a seasoned private equity investor and experienced fund manager. He concentrates on capital formation and investment selection. For perspective, Mark Hauser possesses more than 35 years of investment and company operations experience.
During his investment career’s early years, Mark Hauser served as Cincinnati-based Reynolds Dewitt Securities’ Vice President. While at this financial services firm, he performed merchant banking functions that laid the groundwork for public offerings of several firms. The company’s clients included Future Healthcare, Health Images, and MidAmerican Waste Systems.
In addition to his investment-related work, Mark Hauser served on multiple Boards of Directors. He worked with food and beverage, consumer goods, textile manufacturing, and digital advertising companies. He also served on boards for defense- and security-related businesses that operated with government contracts.
Today, Mark Hauser combines well-rounded investment operations and proven fund management experience. He is well-positioned to lead Hauser Private Equity’s continued growth.
About Hauser Private Equity
Cincinnati-based Hauser Private Equity serves as a co-investor and proven fund manager. The firm represents high-net-worth families and individuals in lower-middle and middle markets, with control buyout fund partnerships.
Hauser Private Equity’s directors and limited partners possess multi-industry expertise. This advantage enables them to perform thorough due diligence prior to executing each investment. Specifically, the fund’s managers target the healthcare, technology-enabled services, and industrial sectors.
Besides investments in private equity-backed companies, Hauser Private Equity invests in private equity funds.
The Parties Focus on Forward Progress
As all parties to the Dominion Voting Systems settlement move forward, this nationwide voting systems operator is preparing its infrastructure and equipment for the upcoming 2024 elections.
Staple Street Capital Group continues its mutually beneficial relationships with Hauser Private Equity and Co-Managing Partner Mark Hauser. Both firms are solely focused on maximizing their investments’ value. Realizing their respective goals will enable these companies to maintain their prominent positions in the United States financial services industry.
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