Private equity firm ICV Partners has agreed to buy Diversified Restaurant Holdings, which operates 64 Buffalo Wild Wings restaurants across five states, DRH said Wednesday.
ICV Partners LLC and its affiliates are purchasing the franchisee in an all-cash transaction valued at approximately $130 million, including outstanding debt and transaction expenses. Shareholders of DRH, which is listed as SAUC on the Nasdaq exchange, will receive $1.05 per share, which is about a 123% premium to its closing share price on Nov. 5, 2018.
The stock surged from 47 cents to $1.04 on the news.
This is ICV’s first investment in a restaurant, according to its web site, although in the past it has invested in food and ingredient companies, including Stauber Performance Ingredients Inc., Sterling Foods Ltd., and Chung’s Foods Inc.
Its current portfolio includes Horizon Air Freight, cleaning services company Coverall and American Alliance Dialysis Holdings LLC.
Its web site says it invests in companies with revenue between $25 million and $300 million and earnings margins of 10% or higher.
“As innovative, lower middle market specialists, ICV supports management teams of leading companies at the lower end of the middle market with the capital, resources and expertise to see them through the journey ahead and beyond,” it says.
With 64 restaurants in Fla., Ill, Ind., Mo., and Mich., DRH operates more than 10% of Buffalo Wild Wings’ roughly 590 franchised units.
The casual dining chain had more than 1,200 locations at the end of fiscal 2018, according to NRN Top 200 data. It’s owned by Inspire Brands, which is majority owned by affiliates of Atlanta-based Roark Capital.
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