LITTLETON Colo. Champps Entertainment Inc. has signed a letter of intent to sell its 62-unit namesake restaurant chain to a management-led group for $75 million and the assumption of debt, which stood at $14.8 million as of an October securities filing.
The buyers would include Champps chairman and chief executive Michael O’Donnell, chief financial officer David Womack, and a yet-to-be-formed affiliate of the New York-based private-equity firm Kinderhook Industries LLC.
Champps Entertainment said it will remain a public company after the divestiture, and would use the proceeds to buy another business. It did not specify if that acquisition would be in the restaurant industry.
It also noted that its letter of intent with the O’Donnell group leaves it free to solicit other offers. If it should consummate another deal, the company would be required to pay a “break-up fee” of up to $2 million.
Champps, based here, operates 49 of its namesake casual restaurants and fanchises or holds a licensing agreement to the other 13. The company posted a net loss of $40,000 on revenues of $49.3 million for the quarter ended in October.
O’Donnell is a longtime veteran of the casual-dining market, having held high-level posts at Outback, T.G.I. Friday’s and Ground Round.