A look at summer restaurant deals

A look at summer restaurant deals

Hot M&A market sizzled this summer with nine deals closing

Rubio’s Restaurants Inc. closed this week on its $91 million going-private merger with Mill Road Capital LP, making it the latest restaurant deal closed during a busy summer.

With increased private-equity activity and a return to deal making, the industry saw a summer of heightened merger, acquisition and restructuring activities during the past few months.

Carlsbad, Calif.-based Rubio’s, which operates or franchises 101 fast-casual Mexican foods restaurants, said former stockholders will receive $8.70 per share through the deal. It said company founder Ralph Rubio had retained an ownership stake and would remain on the board of directors and that the company would continue to be run by the existing management team led by president and chief executive Dan Pittard, who also acquired an ownership interest.

Nation’s Restaurant News has recapped this summer’s M&A deals:

• Denver-based Newport Fidelity Holdings LLC said Aug. 18 it would pay $28 million to acquire essentially all the assets of bankrupt casual-dining operator Max & Erma’s Restaurants Inc. Those assets included leases for at least 51 corporate restaurants as well as 26 franchised units and eight area developer agreements, according to documents tied to Max & Erma’s Chapter 11 bankruptcy filing last October. Newport Fidelity Holdings is the parent of Bakers Square and Village Inn family-dining chains, which were purchased out of bankruptcy in early 2009. MORE [3]

• On July 26, Luby's Inc. acquired out of bankruptcy essentially all of the assets of the Fuddruckers casual-dining chain previously owned by Fuddruckers Inc., its parent Magic Brands LLC and affiliated entities. Houston-based Luby's paid $63.5 million in cash to become the owner of 56 Fuddruckers restaurants and the franchisor of another 129 locations and to buy three Koo Koo Roo specialty chicken restaurants. MORE [4]

• Uno Restaurant Holding Corp., parent to the 168-unit Uno Chicago Grill chain, exited from Chapter 11 bankruptcy on July 26, about six months after the Boston-based company sought protection from creditors. Under its reorganization plan, holders of some $142 million in senior secured debt obtained all of the stock in the restructured company, while unsecured creditors garnered about 13 cents on the dollar in a move that reduced total debt of about $180 million to $40 million. The arrangement left former majority shareholder Centre Partners Management LLC with a minor stake in the operation, which is now majority owned by a noteholder group controlled by Twin Haven Capital Partners LLC and Coliseum Capital Management LLC. MORE [5]

• CKE Restaurants Inc., parent of the Carl's Jr. and Hardee's chains, went private July 12 as part of a $1 billion acquisition by affiliates of investment company Apollo Management VII LP. Carpinteria, Calif.-based CKE operates, licenses or franchises 1,233 Carl’s Jr. and 1,901 Hardee’s locations in 42 states and 16 countries. MORE [6]

• Brinker International Inc. divested its 162-unit On The Border Mexican Grill & Cantina chain on July 1 to private-equity firm Golden Gate Capital for $180 million. Dallas-based Brinker, which still owns the Chili’s Grill & Bar and Maggiano’s Little Italy brands, said proceeds would be used to repurchase shares of the company’s stock. MORE [7]

• Bankrupt travel center operator Flying J Inc. of Brigham City, Utah, merged with Pilot Travel Centers LLC of Knoxville, Tenn., on June 30 to create the new Knoxville-based Pilot Flying J. Officials of Pilot Flying J said the merger, which was valued in some news reports at $1.8 billion, including those by the Knoxville News Sentinel Co., yielded a company that would operate two brands in a system consisting of 550 outlets in 43 U.S. states and six Canadian provinces that has annual U.S. foodservice sales of about $460 million.

• Sun Capital Partners Inc. recaptured a controlling interest in casual-dining operator Real Mex Restaurants parent company RM Restaurant Holding Corp. of Cypress, Calif. In a transaction that closed June 24, Sun Capital acquired a portion of the ownership interest in RM Restaurant Holding Corp. and Real Mex controlled by Farallon Capital Management LLC., which pushed the interest of Sun Capital and affiliated firms from just below 50 percent to about 70 percent. MORE [8]

• Earlier in June, Sun Capital acquired the 44-unit Bar Louie casual-dining chain of Glenview, Ill., from Restaurants-America. The terms were not disclosed for the deal, which came on the heels of Sun Capital’s mid-May acquisition of the 539-unit Captain D's Seafood Kitchen chain of Nashville, Tenn., which was previously owned by Sagittarius Brands. MORE [9]

• Oak Hill Capital Partners on June 1 acquired the Dave & Buster’s casual-dining and entertainment chain from Wellspring Capital Partners in a transaction valued at $570 million. Dallas-Based Dave & Buster's has 56 units. MORE [10]

Contact Alan Liddle at [email protected] [11].