Rhône Capital to acquire Fogo de Chão for $560M

Cash deal takes Brazilian steakhouse chain private

Rhône Capital will acquire Fogo de Chão Inc. in a cash deal valued at $560 million, the Brazilian steakhouse chain said Tuesday.

The Dallas-based casual-dining chain said stockholders will receive $15.75 per share, representing a 25.5-percent premium on its Friday closing price of $12.55 per share. The company went public in June 2015 with an $88 million IPO.

Fogo de Chao

CEO Larry Johnson

“We are excited to enter into a new chapter for the company and confident that Rhône will be an invaluable partner as they have a proven and distinguished track record of supporting and driving profitable growth for companies around the world,” said Larry Johnson, Fogo de Chão CEO, in a statement.

The deal has been approved by the chain’s board members, executives and investment funds affiliated with Thomas H. Lee Partners LP, all of which own more than 60 percent of Fogo de Chão shares. The deal is expected to be completed during the second quarter.

“We look forward to collaborating with Fogo and its talented management team to continue the growth of this exceptional business,” said Eytan Tigay, managing director of Rhône Capital, which is based in New York City. “We believe our firm’s global experience, relationships, and longstanding and expanding presence in Brazil is a natural complement to the company and will serve to facilitate Fogo’s domestic and international expansion plans.” 

Jefferies LLC acted as financial advisor to Fogo de Chão. Davis Polk & Wardwell LLP and Weil, Gotshal & Manges LLP served as legal counsel to Fogo and its board. J.P. Morgan Securities LLC served as financial adviser and Sullivan & Cromwell LLP served as legal advisor to Rhône Capital. Credit Suisse and Wells Fargo Bank, National Association are providing financing for the transaction. 

Fogo de Chão, which first opened in Brazil in 1979, operates 38 restaurants in the United States, nine locations in Brazil, two joint-venture restaurants in Mexico and two joint-venture units in the Middle East, in Jeddah, Saudi Arabia, and Dubai, United Arab Emirates.

Contact Ron Ruggless at [email protected]

Follow him on Twitter: @RonRuggless

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