California Pizza Kitchen Inc. will be acquired for $470 million by private-equity firm Golden Gate Capital, the companies said Wednesday morning.
Under terms of the deal, San Francisco-based Golden Gate will pay $18.50 a share to acquire CPK, a price it said represents a 15-percent premium over the restaurant company’s 30-day average share price before the deal was announced. Golden Gate said it would begin its tender offer by June 8.
CPK’s share price was trading up more than 10 percent, at $18.39, Wednesday morning after news of the buyout broke.
The deal, which is expected to close in the third quarter, comes a little over a year after the Los Angeles-based parent of 265 casual-dining restaurants said it would it seek strategic options, including a possible sale.
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“We are very excited as we open a new chapter in the very successful history of CPK,” Rick Rosenfield and Larry Flax, the restaurant company’s co-chief executives and co-chairmen, said in a statement. “Golden Gate Capital is a leading investor in the restaurant industry, with a proven track record as a value-added partner to its portfolio companies, and we believe that its significant commitment and experience in the sector will benefit all of our stakeholders.”
Golden Gate’s restaurant properties include On The Border Mexican Grill and Romano’s Macaroni Grill, two casual-dining brands it acquired at different times from Chili’s parent company Brinker International Inc. The firm also has invested in several retail concepts, including Eddie Bauer, Zales and Express.
“The business that the CPK team has built, with its great product offerings, makes it an ideal fit with our long-term oriented approach to investing,” Josh Olshansky, a managing director with Golden Gate Capital, said in the statement.
In its most recent first quarter, CPK reported net income fell 16 percent to $2.1 million, or 9 cents per share, compared with $2.5 million, or 10 cents per share, in the same quarter a year ago. Revenue dipped 0.5 percent to $155.9 million, which reflected a same-store sales decline of 2.1 percent.
California Pizza Kitchen operates 205 restaurants and franchises or licenses 60 others.
Contact Molly Gise at [email protected].
