Fidelity National Financial Inc., a title insurance and mortgage services provider, agreed to acquire casual-dining operator O’Charley’s Inc. for $9.85 per share, or $221 million in cash, the company said Monday.
FNF already owns about 2.08 million shares, or 9.5 percent, of the Nashville, Tenn.-based restaurant company, which operates 342 restaurants in 18 states under the O’Charley’s, Ninety Nine and Stoney River brands.
It also holds investments in American Blue Ribbons Holdings, which operates the Village Inn, Bakers Square, Max & Erma’s and Legendary Baking brands.
“This transaction provides a number of benefits, including, for our shareholders, a substantial and immediate cash value for their shares,” said David W. Head, president and chief executive of O’Charley’s. “We believe FNF’s expertise and commitment to long-term growth will enable O’Charley’s Inc. to complete its turnaround and achieve its growth objectives, benefiting our employees, guests, business partners and other stakeholders.”
FNF said it plans to begin a tender offer for the shares it does not already control on or around Feb. 24, with the initial offer expected to expire on April 2. The deal will close shortly after that, the company said.
FNF chairman William P. Foley II, said his company had been looking to invest in “a larger, scalable, strategic restaurant operating company to complement our successful investment in American Blue Ribbons Holdings LLC.”
American Blue Ribbon has more than 220 company and 63 franchised restaurants, generating about $460 million in sales annually.
For its fourth quarter, ended Dec. 25, 2011, O’Charley’s posted a loss of about $8 million, compared with a $20.6 million loss for the same quarter a year earlier.
Revenue for the quarter was $182.2 million, a decrease of 0.7 percent from $183.5 million for the fourth quarter of 2010, due to fewer restaurants in operation. Blended same-store sales rose 1.1 percent.
For the full 2011, O’Charley’s reported a $12.1 million loss, compared with a $34.9 million loss in 2010.
Revenue fell to $827.1 million from a year ago tally of $830.1 million. Blended same-store sales rose 1.7 percent.
Contact Paul Frumkin at paul.frumkin@penton.com.