Ignite Restaurant Group Acquires Romano's Macaroni Grill
- Third Polished Casual Concept Joins Joe's Crab Shack and Brick House
Tavern + Tap Brands -
HOUSTON--(BUSINESS WIRE)--
Ignite Restaurant Group (Nasdaq: IRG) today announced that it has agreed
to acquire Romano's Macaroni Grill ("Macaroni Grill") for approximately
$55.0 million in an all-cash transaction from private equity firm Golden
Gate Capital, management and investors. The acquisition will be funded
through a $50 million upsizing of the Company's existing credit
facility. The Company plans to close the acquisition late in the second
quarter of 2013 and expects the transaction to be accretive to earnings
in 2014.
Romano's Macaroni Grill, which opened its first restaurant in 1988,
currently owns and operates 186 units and franchises five units across
36 states. Additionally, the brand franchises an additional 19 units
throughout nine U.S. territories and foreign countries. For the twelve
month period ending December 31, 2012, Romano's Macaroni Grill generated
approximately $385 million in revenues. Average unit volumes are
approximately $2.1 million.
Blending 20 years of tradition with innovative Italian cooking, Macaroni
Grill provides a rich dining experience matched with an authentic
Italian menu. From bronze-cut Italian pastas with seasonal ingredients
to grilled steak, seafood, hand stretched pizzas and flatbreads, and
decadent desserts; a visit to Macaroni Grill is truly an affordable
indulgence. The high quality authentic Italian ingredients, honor system
house wine and opera singers showcase the restaurant's heritage, while
the open kitchen, brick ovens and festive atmosphere bring energy to
every meal. In addition to their restaurants, the brand also features a
line of packaged food products based on dishes offered by the restaurant.
Ray Blanchette, President and Chief Executive Officer of Ignite
Restaurant Group, stated, "As a pioneer in the polished casual segment
and with a similar operating format to our existing brands, Macaroni
Grill is an ideal complement to the Ignite family of brands. We intend
to leverage the unique atmosphere and enhance the high quality menu that
has been a hallmark of Macaroni Grill since its inception. We believe
that our operations, brand management and real estate portfolio
strengths provide tangible opportunities to elevate the brand experience
and drive shareholder value. We have a history of driving operating
improvements at Joe's Crab Shack and we believe we have identified
significant opportunities and synergies that we will leverage over the
next twelve months and beyond. We are excited that this acquisition will
transform Ignite into a company with three high quality casual dining
brands, almost one billion in revenues, and significant earnings growth
potential over time."
Josh Olshansky, Managing Director of Golden Gate Capital, added, "We are
pleased with the outcome of our successful investment in Macaroni Grill
and believe the Company is well positioned for the future. Ignite is a
great strategic partner to help take Macaroni Grill to its next phase of
growth."
2013 Combined Store Count and Revenue
Projections
Unit Count
|
|
|
Pre-transaction
|
|
Acquired in transaction
|
|
Planned 2013
growth
|
|
|
Project unit count
EOY Fiscal 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joe's Crab Shack
|
|
129
|
|
|
|
|
|
|
|
|
|
Brick House Tavern + Tap
|
|
15
|
|
|
|
|
|
|
|
|
|
|
|
144
|
|
|
|
14
|
|
|
|
158
|
|
|
Romano's Macaroni Grill
|
|
|
|
|
|
|
|
|
|
|
|
Company-owned
|
|
|
|
186
|
|
(3)
|
|
|
|
183
|
|
|
Franchised
|
|
|
|
24
|
|
|
|
|
24
|
|
|
Total
|
|
144
|
|
210
|
|
11
|
|
|
|
365
|
|
Planned 2013 net growth considers as many as 11 net new locations. As
previously announced the Company will open 14 new Joe's Crab Shack
and/or Brick House units and convert as many as two units. Additionally,
as many as three Romano's Macaroni Grill units may be closed or
converted to Joe's or Brick House units during fiscal 2013.
Fiscal 2013 Projected Revenues (amounts in millions)
|
|
|
Ignite Restaurant Group
|
|
Romano's Macaroni Grill
|
|
Total
|
|
% Increase as a result of combination
|
|
|
Forecasted IRG 2013
|
|
$510 to $520
|
|
$180 to $190
|
|
$690 to $710
|
|
36
|
%
|
|
|
Pro Forma 2013 Revenues 1
|
|
$510 to $520
|
|
$380 to $400
|
|
$890 to $920
|
|
76
|
%
|
|
(1) Pro Forma 2013 Revenues assumes the acquisition occurred
on January 1, 2013 and reflects an additional $200 million to $210
million of Romano's Macaroni Grill revenue over our forecasted IRG 2013
revenue
The Company's forecasted revenues are based in part on the following
assumptions:
-
As many as 16 new Joe's Crab Shack and/or Brick House restaurants,
including two potential conversions,
-
An approximate 1% comparable sales increase, and
-
The transaction closing late in the second quarter of 2013 and
including approximately 7 additional months of revenue over and above
the revenue assumed for forecasted IRG 2013. Actual revenue may differ
materially from forecasted and pro forma revenue.
Acquisition-Related Costs
The Company expects to incur approximately $8 million in acquisition
related costs, of which approximately $7 million will be expensed at the
close or within the first six months post-close. These costs include
legal, accounting and bank fees, as well as, specific integration costs
such as relocation and severance.
KeyBanc Capital Markets is serving as exclusive financial advisor to
Ignite Restaurant Group. Additionally, KeyBank National Association and
Bank of America Merrill Lynch are Joint Lead Arrangers and Joint
Bookrunners on the transaction financing.
Conference Call
The Company will host a conference call with an accompanying slide
presentation to discuss the acquisition today at 5:00 PM Eastern
Daylight Time. Hosting the call will be Ray Blanchette, President and
Chief Executive Officer, and Michael Dixon, Senior Vice President and
Chief Financial Officer. The conference call can be accessed live over
the phone by dialing 888-298-3457 or for international callers by
dialing 719-325-2332. The slide presentation will be available ahead of
the call and can be accessed at www.igniterestaurants.com
under the "Investors" section. A replay will be available one hour after
the call and can be accessed by dialing 877-870-5176 or 858-384-5517 for
international callers; the password is 8988434. The replay will be
available until February 13, 2013. The call will also be webcast live
from the Company's website at www.igniterestaurants.com,
also under the "Investors" section.
About Ignite Restaurant Group
Ignite Restaurant Group, Inc. owns and operates 129 Joe's Crab Shacks
and 15 Brick House Tavern + Taps. Each brand offers a variety of
high-quality, chef-inspired food and beverages in a distinctive, casual,
high-energy atmosphere. Joe's Crab Shack and Brick House Tavern + Tap
operate in a diverse set of markets across the United States.
About Golden Gate Capital
Golden Gate Capital is a San Francisco-based private equity investment
firm with over $12 billion of capital under management. The principals
of Golden Gate have a long and successful history of investing across a
wide range of industries and transaction types, including
going-privates, corporate divestitures, and recapitalizations, as well
as debt and public equity investments. Golden Gate is one of the most
active investors in multi-unit consumer companies in the country.
Representative investments include Payless ShoeSource, Coldwater Creek,
Pacific Sunwear, California Pizza Kitchen, Eddie Bauer, J.Jill, Express,
Zales, and On the Border Mexican Grill and Cantina. For additional
information, visit www.goldengatecap.com.
Cautionary Note Regarding Forward-Looking Statements
This press release includes "forward-looking statements" within the
meaning of the federal securities laws. Forward-looking statements are
subject to known and unknown risks and uncertainties, many of which may
be beyond the Company's control. The Company cautions you that the
forward-looking information presented in this press release is not a
guarantee of future events, and that actual events and results may
differ materially from those made in or suggested by the forward-looking
information contained in this press release. In addition,
forward-looking statements generally can be identified by the use of
forward-looking terminology such as "may," "plan," "seek," "comfortable
with," "will," "expect," "intend," "estimate," "anticipate," "believe"
or "continue" or the negative thereof or variations thereon or similar
terminology. Examples of forward-looking statements in this press
release include our forecasted revenue for fiscal 2013, our pro forma
revenues for 2013 assuming the Romano's Macaroni Grill transaction
occurred on January 1, 2013, and our estimated acquisition costs.
A number of important factors could cause actual events and results to
differ materially from those contained in or implied by the
forward-looking statements included in this press release, including the
risk factors discussed in the Company's Registration Statement on
Form S-1/A, filed on May 8, 2012 with the Securities and Exchange
Commission (SEC), as supplemented by the risk factors included in the
Company's Quarterly Report on Form 10-Q for the twelve and thirty-six
weeks ended September 12, 2012 (which can both be found at the SEC's
website www.sec.gov)
and each such risk factor is specifically incorporated into this press
release. In addition, we are subject to risks and uncertainties
regarding our ability to close the Romano's Macaroni Grill acquisition
and the timing for any such closing, our ability to successfully finance
the acquisition, our ability to integrate Romano's Macaroni Grill into
Ignite, our ability to realize expected synergies from the acquisition
and when the benefits from any synergies will be realized, the level of
fees, expenses and charges related to the acquisition, and our ability
to timely implement appropriate internal controls and disclosure
controls with respect to the Macaroni Grill assets following the
acquisition and satisfy requirements to file Macaroni Grill financial
information with the SEC. Any forward-looking information presented
herein is made only as of the date of this press release, and the
Company does not undertake any obligation to update or revise any
forward-looking information to reflect changes in assumptions, the
occurrence of unanticipated events, or otherwise.
Investor Relations for Ignite Restaurant Group
Fitzhugh
Taylor
203-682-8261
fitzhugh.taylor@icrinc.com
or
Media
Relations for Ignite Restaurant Group
Liz Brady DiTrapano
646-277-1226
liz.brady@icrinc.com
or
Media
Contact for Golden Gate Capital
Paul Kranhold or Jenny
Gore
415-618-8750
Source: Ignite Restaurant Group
News Provided by Acquire Media
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