Ovation Brands Inc., the Greer, S.C.-based owner of several buffet concepts, has hired financial advisors to evaluate a possible sale of its business, less than three years after emerging from bankruptcy, CEO Anthony Wedo told Nation’s Restaurant News Tuesday.
The owner of 328 restaurants in 35 states has hired Duff & Phelps to evaluate strategic alternatives, including a potential sale. Ovation operates five buffet brands — Ryan’s, HomeTown Buffet, Old Country Buffet, Country Buffet and Fire Mountain — as well as a polished-casual brand called Tahoe Joe’s Famous Steakhouse.
Wedo, who has been Ovation’s CEO since December 2012, said the company has reached a point where it needs additional investment to continue what he calls its “reinvention.”
There are “several interested parties,” he said, but it’s too early to say whether the company will be sold.
“The primary mission is to help existing investors monetize their investment and get more capital into the enterprise,” he said.
Wedo said the process should take six months.
The move represents something of a victory for Ovation and its owners, a collection of distressed debt providers that took over the company in 2012, the second bankruptcy of the operator formerly known as Buffets Inc., in just four years.
At the time, Buffets changed its name to Ovation Brands, hired industry veteran Wedo as CEO and embarked on a plan to “reinvent” its brands. Many of the buffet restaurant concepts have new décor, new menus with individual entrées and higher quality items, and improved service. The plan is to rework all locations.
Wedo said Tahoe Joe’s has had 18 straight quarters of same-store sales growth, but he would not comment on sales at the buffet brands. Restaurants in markets where the brand has been reinvented “are very successful,” he said.
“It’s early in the process,” Wedo said. “It’s proven. The reinventions are proven. Now is the time to aggressively roll it out. That requires additional capital.”
Wedo said that the brands’ reinventions could be divided into two groups. Ryan’s has been rebranded to focus on the company’s Southern heritage, or “Southern family goodness,” Wedo said. The remaining buffet brands have been given a “Main Street” theme, where different types of menu options are offered at different stations under their own sub-brands.
“I’m really proud of my team,” Wedo said. “You can go through an entire career and never reinvent one brand.”
Ovation’s roots date to 2006, with the merger of Buffets Inc. and Ryan’s Restaurant Group., which created a 675-unit buffet giant, but left the company with enormous debt. By 2008, the company went into bankruptcy the first time. It emerged in 2009, but filed for bankruptcy again in 2012, with nearly 500 restaurants.
The company closed 140 locations during its second bankruptcy. Its 328 restaurants today make it half the size it was after the 2006 merger.