Cracker Barrel’s 2012 fiscal year was a good one. The Lebanon, Tennessee-based family dining chain improves sales and profits during the 12 months that ended in September, and so the company doubled its dividend to 50 cents a share. This was really good for its largest shareholder, Biglari Holdings.
There’s little doubt that Ignite Restaurant Group got Macaroni Grill on the cheap. The Texas-based owner of Joe’s Crab Shack overnight became a nearly $1 billion company, adding $385 million in revenue for about 14 cents on the dollar after the $55 million purchase. And yet its stock has stumbled.
We’ve heard a substantial amount of consternation in connection with the restaurant industry in recent months, largely because of cost concerns. Obamacare will hammer labor costs. Commodity costs will make matters worse. And yet, the industry’s job growth last year hit a 17-year high.
With the mergers and acquisition market flourishing, we were wondering when we’d ultimately hear from Tilman Fertitta. We’re no longer wondering. Yesterday, the chairman of Landry’s Restaurants sent a letter to the chairman of New York-based Ark Restaurants, offering to buy the company for $22 per share.
UPDATED: Ignite Restaurant Group executives during their IPO road show last year indicated that they were built to add additional brands. On Wednesday, the Houston-based company did exactly that, buying the 210-unit Macaroni Grill from Golden Gate Capital for a mere $55 million.
Biglari Holdings wants to make some more investments. The San Antonio-based owner of Steak N Shake, among other things, said today that it plans to raise $50 million through a rights offering. The company said the funds would be used for investment, acquisitions or “general corporate purposes.”
Nothing keeps customers away from a restaurant like fear over what is happening with its food, a lesson Yum Brands is learning the hard way right now amid a steep sales decline at its KFC China operations over concerns that poultry farmers have been a little loose with their use of antibiotics.
Red Zone Capital is looking to get out of the burger business. The private equity group, started by Washington Redskins owner Daniel Snyder, is exploring a possible sale of Johnny Rockets, the 50s-themed burger chain it has owned for nearly six years.
Somehow, Cracker Barrel, the highwayside chain of family dining restaurants-slash-rocking chair retailers, has managed to coexist in the same universe with Cracker Barrel, the brand of cheese one can find in a grocery store. No more. Cracker Barrel, the cheese, is suing Cracker Barrel, the restaurant, over the Cracker Barrel trademark.
If you’re a big franchisee who operates a large, well-known brand and controls a big market, now might be a good time to sell. That’s because, amid a flurry of deals late last year and a growing interest in the franchise sector, multiples for such companies appear to be heading into a stratosphere typically reserved for franchisors.
When news first broke that Bob Evans was looking to sell Mimi’s Café, one estimate put the price for the chain at over $200 million. Instead, it sold this week to LeDuff America for $50 million. But not even that gives a full indication of how much the price for Mimi’s has declined in the year it’s been for sale.
Bob Evans bought a hot restaurant concept called Mimi’s Café in 2004 for $103 million, much of which was assumed debt. Nine difficult years later, Bob Evans is selling Mimi’s, but not at a profit. The Columbus, Ohio-based company said today that it sold Mimi’s to LeDuff America for $50 million.
Is health food the next big wave? Investors sure think so. Current shareholders and other investors, led by Los Angeles-based private equity group Brentwood Associates, recently pumped $20 million into Santa Monica-based vegetarian fast-casual chain Veggie Grill.
In a note this morning following meetings with McDonald’s executives, Goldman Sachs analyst Michael Kelter said that McDonald’s national launch of “Mighty Wings” may be on the horizon, effectively confirming the worst fears of every chicken wing buyer in the United States.
That Chuy’s investment appears to be working out for Goode Partners, the New York-based private equity fund that is the controlling investors in the Texas-based Mexican chain. Goode is selling the bulk of the 4.5 million shares that late yesterday priced at $25 a share.
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