MEMPHIS Tenn. The investment group led by industry veteran Steve Lynn has completed its $38-million acquisition of Back Yard Burgers, Inc., operator or franchisor of the namesake regional quick-service chain.
The merger of the company into BBAC Merger Sub, Inc., a wholly-owned subsidiary of BBAC, LLC, completed the $6.50-per-share buyout that was announced in June, after nearly a year of behind-the-scenes negotiations.
The deal had been delayed by a lawsuit claiming Back Yard had violated the federal Fair and Accurate Credit Transactions Act and the Tennessee Consumer Protection Acts by failing to mask information on customers’ credit-card receipts. The class-action suit was filed on Aug. 3, the same day Back Yard shareholders approved the buyout. It was settled in September, according to filings with the Securities and Exchange Commission.
Lynn is a former chairman and chief executive of Shoney's Inc. and Sonic Corp. The buying group also includes Reid M. Zeising, managing partner of Cherokee Advisors LLC, the investment company that manages the consortium, and Pharos Capital Group LLC, a financial advisory concern. The buyers are expected to expand Back Yard Burgers’ geographic scope. The chain, based here, currently operates in 20 states.
As a result of the merger, Back Yard Burgers common stock ceased to trade on Nasdaq at the close of the market on Monday and was de-listed.