Granite City exploring possible sale, mergerGranite City exploring possible sale, merger

Granite City Food & Brewery Ltd. has hired an investment bank to explore a possible sale, the company said this week.

The Minneapolis-based casual-dining operator has hired Houlihan Lokey Capital Inc. to market the company and gauge interest in a sale or merger. Granite City has 31 restaurants, in addition to five Cadillac Ranch units.

Granite City’s revenue has grown over the past five years, but a heavy debt burden has kept it from making a profit. In 2013, the company’s stock was delisted from the Nasdaq Stock Exchange because it didn’t meet minimum shareholders’ equity requirements.

According to its third-quarter earnings report, Granite City has $23.4 million in long-term debt and $24 million in capital lease obligations.

In 2014, adjusted earnings before interest, taxes, depreciation and amortization, or EBITDA, rose 25 percent, to $10 million, from $8 million the previous year. However, the company reported a net loss of $2.6 million in 2014, though that was narrower than the $3.4 million loss it reported the previous year.

Revenue increased 1.5 percent in 2014, to $136 million, from $134 million the previous year. Same-store sales rose 0.7 percent for the year.

Granite City has reported a net loss every year since its inception, according to SEC filings.

In 2011, Concept Development Partners, a subsidiary of Dallas-based investment firm CIC Partners, became Granite City’s controlling shareholder, and currently controls nearly 80 percent of the company’s stock.

Granite City said it expects to build four additional units, in Illinois, Michigan and Maryland in 2015.

Contact Jonathan Maze at [email protected].
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