Del Frisco's Restaurant Group, Inc. has agreed to be acquired by private equity firm L Catterton. The all-cash transaction is valued at approximately $650 million. Del Frisco's stockholders will receive $8 per share. Irving, Texas-based Del Frisco's is parent to the Del Frisco's Double Eagle Steakhouse, Del Frisco's Grill, Barcelona Wine Bar and Bartaco concepts.
"Over the course of our review, the committee evaluated a full range of strategic, financial and capital structure alternatives to best serve the interests of our stockholders,” said Joe Reece, Committee Chairman, Del Frisco's Restaurant Group, Inc., in a news release. “After a thorough process, including considering Del Frisco's current operations and future prospects, the committee and the board is confident that this transaction offers the most promising opportunity to realize the highest value for our stockholders.”
The agreement was unanimously approved by Del Frisco's board of Directors. The transaction is expected to be completed by the fourth quarter of 2019, subject to approval by Del Frisco's Restaurant Group stockholders.
Back in December, the restaurant chain said it was evaluating business options, including a sale, amid activist pressure from Engaged Capital LLC., which owns 9.9% of Del Frisco's shares.
In fiscal 2018 ended in December, Del Frisco's posted revenue of $419.5 million, up 16.1% from fiscal 2017. That growth, in large part, reflected the June 2018 acquisition of Barteca Holdings LLC, which included Barcelona Wine Bar and Bartaco concepts, for $331.2 million. In September 2018, the company sold the14-unit Sullivan's Steakhouse chain to an affiliate of Romano's Macaroni Grill, which partially offset revenues post acquisition.
"In consultation with our outside advisors, the board has been evaluating several strategic and financial alternative options since December 2018,” said Ian R. Carter, board chairman, Del Frisco's Restaurant Group, in the release. “This transaction offers immediate liquidity at a significant premium for our stockholders while providing the best path forward for our Del Frisco's brands, our employees and loyal guests.”
L Catterton has invested in restaurant concepts such as Bloomin' Brands Inc., Cheddar's Scratch Kitchen, Crystal Jade, Culinary Concepts by Jean-Georges and P.F. Chang's.
"At L Catterton, we bring more than just capital – we bring significant operational expertise to our investments," said Andrew Taub, Managing Partner at L Catterton.
"Over the last 30 years, L Catterton has invested in nearly 30 restaurant concepts globally to create a number of industry leaders. Del Frisco's has four outstanding brands in two distinct and attractive categories – upscale regionally-inspired cuisine, and steak and grill. We're excited to partner with the Company to harness the power of these brands by operating the upscale regionally-inspired brands separately from the steak and grill concepts."
Update June 24, 2019: This story was edited to include recent annual revenues for the company.
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