Shipley Do-Nuts Acquired by California Private Equity Firm

Shipley Do-Nuts, which has been owned since 2021 by Austin-based Peak Rock Capital, has been acquired by Levine Leichtman Capital Partners, a private equity firm based in Beverly Hills, Calif.

Financial terms of the deal for the Houston-based purveyor of kolaches and doughnuts were not disclosed.

Shipley CEO Flynn Dekker said in an interview that the past five years have seen the company grow more quickly than at any other point in its nearly 90-year history, entering into new markets while continuing to add stores in its Texas stronghold. Dekker said Shipley has more than 380 stores in 14 states — including about two dozen in the Austin metro area — and plans to enter Missouri and New Mexico in the next six months or so.

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“It’s new investment in the business, which will enable us to continue to grow,” he said. “We currently really exist in the southeast quadrant of the U.S., and we’ve been very focused on fortressing that part of the country because we already have brand awareness there and it’s a very favorable business environment.”

Shipley traces its roots to 1936, when founder Lawrence Shipley opened a small stand in Houston featuring a family recipe for glazed doughnuts.

As the company grew outside the metro area, it continued to lean into its Texas roots. In the 1990s, for example, it added kolaches and klobasniky to its core menu. The savory Czech pastries now account for about 40% of Shipley’s total sales in its Houston-area stores, Dekker said, and a bit less than that in outer markets.

After several generations of family ownership, Shipley was sold to Peak Rock Capital in 2021. At the time, the chain had more than 300 locations in nine states.

In a statement, Peak Rock said Shipley more than doubled systemwide sales and accelerated new unit development since its acquisition.

“We are proud of the success Shipley has achieved during our ownership and honored to have contributed to the evolution of this iconic brand,” said Robert Strauss, senior managing director. “Our investments in people, processes and technology have propelled Shipley to achieve transformational growth.”

Dekker said Peak Rock had been “exploring options” for several months.

“We had many suitors,” he said. “I’m happy for that. I’m also happy to say that I think we ended up with the one that’s the best fit for our business based on where we are in the life cycle. Levine has great experience with franchise restaurant businesses.”