Fidelity National Financial Inc. today said its private-equity subsidiary, Fidelity National Financial Ventures LLC, parent of the 106-unit casual-dining chain Ninety Nine Restaurant & Pub, would merge that company with J. Alexander’s Holdings Inc.
J. Alexander’s Holdings operates 19 J. Alexander’s locations, 12 Redlands Grills, 12 Stony Rivers and the single-unit Lyndhurst Grill, all of which are upscale casual-dining restaurants. The Nashville-based company operates restaurants mostly in the Southeast and Midwest.
Fidelity Newport Holdings LLC, a majority owned subsidiary of Fidelity National Financial Ventures and Ninety Nine’s operator, will exchange all of its ownership interest in 99 Restaurants LLC for common-share equivalents of J. Alexander Holdings.
Under the terms of the new agreement, 99 Restaurants, which operates restaurants in New England and New York, will have an enterprise value of $199 million and an equity value of $179 million. It will have $20 million in Fidelity Newport Holdings debt that J. Alexander Holdings will refinance at closing.
Prior to the closing, Fidelity National Financial Ventures will contribute $40 million into 99 Restaurants equity, proceeds for which will be used to repay Fidelity Newport Holdings debt. Shares in J. Alexander’s Holdings stock will be valued at $11 per share.
In exchange for the $40 million investment, J. Alexander Holdings will issue approximately 16.3 million common share equivalents to Fidelity Newport Holdings and Fidelity National Financial Ventures — after which it will have approximately 31 million common share equivalents.
Fidelity National Financial nonexecutive chairman William Foley will join the J. Alexander’s Holdings board of directors, and it is expected that current president and CEO of J. Alexander’s LLC Lonnie Stout will be CEO of the combined company.
J. Alexander’s Holdings’ shareholders are expected to vote on the merger in the fourth quarter of 2017.
In 2016, 99 Restaurants had revenue of around $304 million; together, the combined companies generated more than $520 million in revenue, according to Fidelity National Financial.
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