Arby’s Restaurant Group Inc. has agreed to buy Buffalo Wild Wings Inc. for $157 per share, the companies said on Tuesday.

The merger values the Minneapolis-based chicken wing chain at $2.9 billion, including the company’s debt.

Arby’s is owned by Roark Capital Group, which has been said for several days to be bidding on Buffalo Wild Wings.

The $157 per share price that Roark is paying for Buffalo Wild Wings is higher than the $150 per share initially reported, and is a 38-percent premium off of Buffalo Wild Wings’ stock price on Nov. 13, before reports of a possible deal were published.

The merger is expected to close in the first quarter of next year. Afterwards, Arby’s CEO Paul Brown will be CEO of the parent company to both restaurant chains.

“We look forward to leveraging the combined strengths of both organizations into a truly differentiated and transformative multi-brand restaurant company,” Brown said in a statement.

Buffalo Wild Wings had been one of the hottest restaurant stocks on Wall Street, with a price exceeding $200, until sales began weakening two years ago. Earlier this year, the activist investor Marcato Capital Management won three seats to the company’s board of directors, prompting longtime CEO Sally Smith to announce her retirement.

Marcato, which owns 6.4 percent of the company, has agreed to vote in favor of the sale.

“This transaction provides compelling value to our shareholders and is a testament to the hard work and efforts by our talented team members and franchisees,” Smith said in a statement.

Buffalo Wild Wings operates more than 1,250 locations, split between company and franchised locations. Arby’s operates more than 3,300 locations.

Roark continues to be one of the most aggressive investors in the restaurant industry. It has invested in 62 franchised or multi-unit brands, and in recent years has acquired companies like Jimmy John’s and CKE Restaurants Inc. Its brands have $27 billion in annual revenue and more than 29,000 locations.

Contact Jonathan Maze at jonathan.maze@penton.com 
Follow him on Twitter: @jonathanmaze

This post is part of the On the Margin blog.

Back in February, I suggested that 2017 was going to be a huge year for restaurant mergers and acquisitions. I had no idea it would be this huge.                       

With Roark Capital-owned Arby’s Restaurant Group Inc. announcing an acquisition of Buffalo Wild Wings Inc. Tuesday, there have been 33 announced deals for restaurant companies this year.

There is still a month left in the year.

“We’re in a high activity mode right now,” Damon Chandik, head of restaurant investment banking at Piper Jaffray, said during the Restaurant Finance & Development Conference earlier this month.

We did not include in that list the upcoming acquisition of Qdoba Mexican Eats by the private equity firm Apollo Global Management.

Also not included are smaller chains, such as the six-unit Mo’Bettahs— as, quite frankly, they would be badly undercounted. And we haven’t included significant investments that didn’t result in a change of control, like Roark’s investment in the quick-service chain Culver’s. Nor does the list include franchisees.

The immense movement of restaurant chains comes even as some concepts couldn’t find buyers, such as Bravo Brio Restaurant Group Inc., and Fiesta Restaurant Group Inc.

Yet, for the most part, the environment is ripe for mergers and acquisitions. Private equity firms are eager to make investments in the restaurant business. Lenders are perfectly willing to help fund deals. Strategic buyers have been willing acquirers in their search for more growth.

Some buyers are willing to pay extraordinarily high prices for their targets, as Restaurant Brands Inc. did with Popeyes Louisiana Kitchen and JAB Holdings did with Panera Bread Co. 

Other companies, like Buffalo Wild Wings, have seen their stock prices fall to the point that they made good acquisition targets. The Minneapolis-based chicken wing chain’s stock price had been down 28 percent from its highs last December when Roark came knocking.

That apparently made it too tempting for Roark. At $157 per share, Roark will pay $2.4 billion, and also assume some debt, giving the deal a valuation multiple of just more than 10 times earnings before interest, taxes, depreciation and amortization, or EBITDA.

That’s a good deal for Roark and Arby’s. Buffalo Wild Wings has potential both for increasing the number of takeout customers and for luring customers who want an experience. While sales have stumbled recently, a lot of chains have seen sales stumble recently. Some time out of the public company limelight could work wonders. 

In addition, the company has a lot of white space in international markets. 

Arby’s, meanwhile, has surged under Roark and CEO Paul Brown — enjoying six years of same-store sales growth, and increasing unit volumes by 27 percent since 2013. Brown will be the CEO of the combined Arby’s-Buffalo Wild Wings company, whatever it will be called.

How long such an environment continues remains to be seen. The general sentiment is that the hot market for restaurant acquisitions will soon come to an end, especially if the economy appears headed for a recession or if interest rates rise. 

But numerous smaller, publicly traded chains have seen their valuations get hammered this year. It’s not out of question that some could find themselves the target of opportunistic buyers.

Jonathan Maze, Nation’s Restaurant News senior financial editor, does not directly own stock or interest in a restaurant company.

Contact Jonathan Maze at jonathan.maze@penton.com

Follow him on Twitter at @jonathanmaze

Jack in the Box Inc. said Thursday it plans to prioritize value in its advertising early next year. The move follows disappointing fiscal fourth-quarter results and an earnings call that shed no light on a potential sale of its Qdoba Mexican Eats to private equity.

“Our value promotion will be our primary message on media,” said CEO Lenny Comma on Thursday’s earnings call, adding that discount deals would have the “lion’s share” of advertising bandwidth as new limited time offers and specials between $1 and $5 are rolled out in January.

At the close of the second quarter, Comma announced a pivot to single-item value promotions after the brand felt that it was being “dragged into that space” by its rivals.

Despite gaining some traction with value plays, Jack in the Box same-store sales slid 1 percent in the fiscal fourth quarter ended Oct. 1.

Revenue fell nearly 15 percent overall to $338. 7 million, while net income decreased more than 6 percent, to $0.97 per diluted share. Both figures were below analysts’ expectations.

“We don’t want to be in a position where we are reacting after the fact,” said Comma regarding the emphasis on discounting. “You will see us have similar price points in the marketplace in anticipation of what’s to come from some of our major competitors.”

Comma briefly mentioned Qdoba’s future on the call amid ongoing talks to sell the Mexican fast-casual brand to Apollo Global Management, but he declined to comment further on next steps.

Meanwhile, Qdoba’s same-store sales dropped 2.1 percent systemwide in the quarter, far more than analysts had expected, spurred by a 4 percent slide at company-owned locations. 

In May, Comma said that Jack in the Box’s overall valuation was apparently impacted by having two different business models.

Qdoba’s 700-plus restaurants are mostly company-owned, an issue that some observers say could ultimately push Jack in the Box to sell the brand.

Sources close to the Qdoba negotiations who asked to remain anonymous due to the confidential nature of the talks said that this is indeed motivating Jack in the Box to consider unloading the struggling Mexican concept.

Despite the struggles, Jack in the Box shares were higher in Thursday trading. 

In contrast to Qdoba, the company is moving forward with its franchising push for its namesake quick-service burger brand. 

Sixty existing Jack in the Box restaurants were sold in the fourth quarter to franchisees, setting the tally for the fiscal year at nearly 180 and leaving only 12 percent of stores in under company control.

The company expects Jack in the Box to be 90 to 95 percent franchised by the end of fiscal 2018.

Digital and delivery

The San Diego-based company said it is also updating Jack in the Box’s digital and delivery offerings.

The company is testing a mobile app that is expected to be available across the system in 2018, and is planning to expand delivery to more than 1,300 Jack in the Box restaurants by February. This represents nearly 60 percent of its locations.

Jack in the Box has more than 2,200 restaurants across 21 states and Guam, and more than 700 Qdoba restaurants in 47 states, Washington, D.C., and Canada.

Contact: Dan.Orlando@penton.com

Twitter: @DanAMX

The multiconcept group behind the Postino WineCafe concept has won a significant investment from private-equity firm Brentwood Associates, the company said Thursday.

Phoenix-based Upward Projects is the operator of five brands and 12 restaurants in Arizona and Colorado, including Postino, Joyride Taco House, Federal Pizza, Windsor and Churn.

Los Angeles-based Brentwood has a broad restaurant investment portfolio that includes Blaze Pizza, Lazy Dog Restaurants, Pacific Catch and Veggie Grill. 

Terms of the deal were not disclosed, but Brentwood partners Rahul Aggarwal, Steve Moore and affiliate Greg Dollarhyde will join Upward Projects’ board of directors. 

Dollarhyde has served as chair or CEO of eight companies, including Zoe’s Kitchen, Veggie Grill and Baja Fresh Mexican Grill. Separately, Dollarhyde is also an investor in the quick-service Starbird chicken chain.

Founded by Lauren Bailey and Craig DeMarco, Upward launched in 2001 with Postino, which was designed to be an accessible and welcoming wine bar. 

The wine-and-craft-beer-friendly menu includes shareable dishes largely under $15. The concept now has seven locations in Phoenix and Denver, and the investment will support further growth of that brand. 

The first Texas location for Postino is scheduled to open in Houston in April 2018, with additional locations planned for Arizona, Colorado and elsewhere across the U.S.

Following the transaction, Bailey will remain as CEO and DeMarco will serve as a director and strategic adviser. The founders and current management team retain a substantial ownership stake in the company, they said. 

“Upward Projects and Brentwood are a perfect match,” said DeMarco in a statement. “They share the same cultural fabric — a focus on people-first and an insatiable appetite for innovation and doing things differently.”

Aggarwal of Brentwood said the Postino brand is one of the most unique the firm has encountered. 

“Postino lives in the grey space of quality, authenticity and approachability that’s highly inclusive and really attractive to a broad spectrum of consumers,” he said in a statement. 

Upward Projects was advised by Piper Jaffray & Co. and its legal counsel was Davis Wright Tremaine LLP. Brentwood was represented by Burr & Forman LLP.

Contact Lisa Jennings at lisa.jennings@penton.com

Follow her on Twitter: @livetodineout

With one month left in the year, 2017 has been a remarkably active period for restaurant industry mergers and acquisitions.

How active? There have been at least 33 deals for restaurant brand operators this year, not including acquisitions of small chains with fewer than 10 locations. Here’s a look at every one of the restaurant companies trading hands this year.

Contact Jonathan Maze at jonathan.maze@penton.com 

Follow him on Twitter: @JonathanMaze 

French commercial real estate giant Unibail-Rodamco will buy global mall operator Westfield Corp. for nearly $16 billion in cash and stock, the companies announced Tuesday.

The deal creates a commercial landlord juggernaut worth about $72 billion and comes at a time when malls are under great pressure for reinvention as online retailers continue to take market share.

Unibail will swap 0.01844 share of its stock, plus $2.67 in cash for each share of Westfield. That values Australia-based Westfield at 10.01 Australian dollars, or $7.55 per share. It’s a 17.8 percent premium over Westfield’s closing Monday price on the Australian Securities Exchange.

Unibail-Rodamco itself was created in a merger of France’s Unibail and Europe’s Rodamco in 2007, and Tuesday’s deal gives it a foothold in malls that have put dining at the forefront of the new mall experience.

Westfield operates shopping malls in New York’s World Trade Center, Los Angeles’ Century City and the two largest malls in Greater London.

And a reimagining of restaurants has been a main part of increasing the length of time shoppers spend on the property.

So, it’s goodbye to the food court and hello to dining terrace or the urban bistro.

The aim to completely replace the experience of eat and run at the food court to one where guests linger. And the dining runs from fast food to destination eateries with an eye toward popular local names.

In 2016, Tuscan-farmhouse themed chain Il Fornaio decided to open a new location at The Village at Westfield Topanga in Woodland Hills, Calif.

“We think because of the visibility in this center and the amount of people and offices in the area, this will be above our unit average,” Michael Mindel, senior vice president of marketing at Il Fornaio, said at the time.

At Westfield Century City, there is Shake Shack, Eataly and a highly anticipated future opening of Din Tai Fung, known for long lines for its soup dumplings.

And at the Westfield Garden State Plaza in Paramus, N.J., the biggest mall in the state, Westfield announced at the beginning of 2017 it was completely revamping the food court. In addition to new furniture and fixtures, there were art installations and video screens (to compensate for an absence of a view on the lower level) and a Jersey Shore-themed play area when it opened in the fall.

While initially the restaurants were the same as the earlier food court, South American restaurants Salsa Arepa opened its first location at the mall in November.

When the deal is completed, the newly formed company will have 104 prime assets in 13 countries.

It will have shopping malls in London, Los Angeles, Munich, New York, Paris, San Francisco, San Jose, Stockholm, Vienna, Madrid and Warsaw.

Canadian restaurant franchisor MTY Food Group Inc. announced Tuesday it will acquire Imvescor Restaurant Group Inc. in a cash-and-stock deal worth 248 million Canadian dollars.

The Montreal-based restaurant franchisors will control more than 5,700 units across 75 brands, generating systemwide sales of about CA$2.9 billion.

With the tie-up, MTY adds brands such as Scores, Pizza Delight, Commensal, Bâton Rouge Steakhouse & Bar, Ben & Florentine and Toujours Mikes to a portfolio that already includes TCBY Frozen Yogurt, Big Smoke Burger, Le Steak Frites and Wasabi Grill and Noodle.

MTY will pay CA$4.10 per share to Imvescor shareholders, a 13.3 percent premium, with CA$50 million of it in cash, representing 20 percent of the total purchase price. Both companies’ shares trade on the Toronto Stock Exchange.

The move comes less than a month after MTY purchased the California-based parent company of The Counter and Built Custom Burgers, CB Franchise Systems LLC, for about US$25 million.

“Since the acquisition of Kahala Brands in July 2016, MTY has been seeking potential additions to its strong portfolio of brands,” Stanley Ma, CEO and chairman of MTY, said in a statement at the time.

MTY made other sizable additions to its portfolio in 2016, adding the parents of Blimpie, Cold Stone Creamery, Planet Smoothie and Pinkberry, as well as Baja Fresh Mexican Grill and La Salsa Fresh Mexican Grill, for about US$337 million.

Representatives for both companies did not immediately respond to requests for comment.

Contact: Dan.Orlando@Knect365

Follow him on Twitter: @DanAMX

Sentinel Capital Partners has acquired quick-service seafood chain Captain D’s from Centre Partners Management LLC, making it the fifth restaurant chain currently in the New York City-based private-equity firm’s portfolio.

Terms of the purchase were not disclosed.

Nashville-based Captain D’s operates 303 restaurants and franchises an additional 227, mostly in the Southeast and Midwest.

“With Captain D’s seafood menu based on ocean-caught fish and a beach-themed dining format, it is uniquely positioned in the QSR market, a sub category that has outgrown the broader restaurant industry since 2011,” Sentinel said in a press release announcing the purchase.

Sentinel owns two other specialty limited-service chains: Fazoli’s, which specializes in Italian pasta, and Newk’s Eatery, which has a broad menu focused on scratch cooking. It also owns family-dining chain Huddle House and casual-dining chain TGI Fridays.

“We are very excited to partner with Captain D’s highly-experienced and accomplished management team,” Sentinel senior partner John McCormack said in a statement. “Captain D’s holds a unique market position and was recently recognized as one of the top 10 brands in America for consumer loyalty. Captain D’s continues to attract younger guests and is the clear category leader. Moreover, its same-store-sales growth over the past decade is in the very top QSR tier regardless of category.”

For the year ended December 2016, Captain D’s had $543.6 million in sales, up by 2.24 percent from the previous year, and it opened a net six locations, according to Nation’s Restaurant News’ Top 100 report.

It has attributed some of that growth to its grilled fish platform, introduced in 2014.

Captain D’s ranked eighth in NRN’s Consumer Picks survey in terms of brand loyalty. NRN conducted the survey in partnership with Datassential.

CEO Phil Greifeld, who has led Captain D’s for seven years, and, incidentally, is also a previous Huddle House CEO, said, “Sentinel’s more than two decades of experience in the restaurant franchising sector makes the firm an ideal partner for us as we enter a new phase of expansion. We see significant opportunities to grow inside our existing footprint as well as into new regions. Our brand has never been stronger.”

Bruce Pollack, managing partner of Centre Partners, said in a press release: “Through our partnership with Phil Greifeld and his management team, we revitalized the Captain D's brand, accelerated growth through new unit openings and improved performance through best-in-class execution. Captain D's is well positioned for continued growth and we wish the team every success under new ownership.”

Sentinel partner Michael Fabian praised the chain’s appeal to franchisees.

“Captain D’s provides highly attractive and consistent unit economics for its franchise partners,” he said. “This has fueled substantial growth in new franchise sales and openings over the last several years. We look forward to partnering with Phil and his talented team to help accelerate this growth in years ahead.”

Captain D’s has enjoyed same-store sales growth for the past six years. In 2015 its average unit volume exceeded $1 million, and it increased to $1.06 million in 2016, according to NRN Top 100 data.

Fabian told NRN that Captain D’s would maintain its positioning as a quick service brand, although he said it also had some fast-casual elements, including its grilled fish platform and interiors that have been upgraded in recent years.

He added that some locations employ fast-casual-style service, taking orders at the counter but delivering food to customers’ tables.

“They’re testing that out, so that’s probably the direction they’re going,” he said.

“We do think it can play in [the fast-casual] space a little bit, but there’s a large group of people who like the value and, frankly, the food, in fast food, and we’re accepting of what that is too and think it’s a good spot.”

He added that there was “room for both” customers who like the new grilled platform and those who enjoy the traditional fried items.

Fabian said they wanted to expand the brand’s geographical footprint.

“We think there is a decent amount of room to open within the Southeast footprint. We’re believers that as you grow — and we would like to expand geographically — that you’ve got to do that in concentric circles,” moving to states adjacent to existing markets, he said.

He added that the chain’s management felt that Texas and Louisiana were promising markets.

“Definitely there will be some focus there,” he said.

Contact Bret Thorn at bret.thorn@KNect365.com 

Follow him on Twitter: @FoodWriterDiary 

Dec. 18, 2017: This story has been updated with additional comments from Michael Fabian

Jack in the Box Inc. agreed to sell its fast-casual Qdoba Restaurant Corp. to Apollo Global Management LLC in a $305 million deal, the company said Tuesday. 

San Diego-based Jack in the Box said the cash deal covers more than 700 owned and franchised restaurants and is expected to close by April 2018. 

New York-based Apollo also owns Irving, Texas-based CEC Entertainment Inc., parent to the Chuck E. Cheese’s and Peter Piper Pizza dining-arcade brands.

Jack in the Box had announced earlier this year it was considering strategic options for Qdoba. The brand’s systemwide same-store sales fell 2.1 percent in the fourth quarter ended Oct. 1, including a 4 percent slide at company-owned locations.

At the end of that “robust process,” said Lenny Comma, Jack in the Box CEO and chairman, in a statement, “our board of directors has determined that the sale of Qdoba is the best alternative for enhancing shareholder value and is consistent with the company’s desire to transition to a less capital-intensive business model.” Jack in the Box is predominantly franchised. 

Comma said Jack in the Box acquired Qdoba in 2003, when it had 85 locations in 16 states with $65 million in systemwide sales. 

“Over the past 14 years, net units have grown at a compound annual growth rate of 16 percent,” Comma said. The brand now has units in 47 states, the District of Columbia and Canada, and systemwide sales of more than $820 million in fiscal 2017. 

Lance Milken, a senior partner at Apollo, said, “We are extremely excited to be acquiring Qdoba and look forward to working with the management team, employees and franchisees to continue building the Qdoba brand.” 

The Kennesaw, Ga.-based Qdoba Franchisee Association said it supported the proposed sale.

“We believe this decision will foster hope and excitement, along with growth potential, among the franchisee community,” said Ron Stokes, who chairs the group and franchises 56 units, in a statement. The QFA was formed in June to represent the franchise owners.

“QFA is excited to work with such a diverse company as Apollo Global,” Stokes said. “We look forward to a collaborative partnership and are optimistic about the opportunities available through the international company.”

Jack in the Box’s fourth-quarter profit declined more than 6 percent, to 97 cents a share, in the fourth quarter and revenue fell nearly 15 percent to $338.7 million. Jack in the Box same-store sales fell 1 percent in the quarter. 

Morgan Stanley & Co. and Gibson, Dunn & Crutcher advised Jack in the Box in the deal. Apollo was advised by Morgan, Lewis & Bockius; Paul, Weiss, Rifkind, Wharton & Garrison; Deutsche Bank Securities; and PJ Solomon.

Jack in the Box has more than 2,200 restaurants in 21 states and Guam. 

Jack in the Box's stock rose about 2 percent, to nearly $103 a share, in trading just after the opening bell Tuesday. Apollo shares were flat at about $33 a share.

Contact Ron Ruggless at Ronald.Ruggless@Penton.com

Follow him on Twitter: @RonRuggless

Update Dec. 19, 2017 — This story has been updated with comments from the Qdoba Franchisee Association.

Ruby Tuesday Inc. expects to close its earlier-announced sale to NRD Capital on Dec. 21 after rejecting a “highly conditionally and not fully financed proposal” from another suitor last week, the company said Monday.

The Maryville, Tenn.-based casual-dining company, which agreed Oct. 21 to be acquired by the Atlanta-based private-equity firm NRD Capital in a deal valued at $335 million, said the alternative proposal came from The Boaz Group.

Several shareholders had filed lawsuits challenging the proposed Ruby Tuesday-NRD Capital deal, in which the private-equity firm agreed to pay $2.40 a share.

While the Boaz bid was for $2.88 share, Ruby Tuesday in a press release Monday said it rejected the latest proposal on Dec. 12 because Boaz “had failed on multiple occasions to produce an actionable proposal despite having been provided with ample time and opportunity to do so.”

Ruby Tuesday has been seeking strategic alternatives since March after suffering same-store sales and traffic declines and closing about 100 units. In October, the company said revenue in the first quarter ended Sept. 5 fell 15.3 percent to $217.3 million as same-store sales fell 5.8 percent. Traffic in the period fell 9.4 percent.

On the Boaz bid, Ruby Tuesday’s board of directors said it sought clarifications on the proposal and rejected it after determining it would not be superior to the NRD acquisition. The board continued to recommend shareholders vote for the NRD proposal.

As of Sept. 5, Ruby Tuesday had 599 Ruby Tuesday restaurants in 41 states, 14 other countries and Guam. The company owns 541 units and franchises 58.

Contact Ron Ruggless at Ronald.Ruggless@Penton.com

Follow him on Twitter: @RonRuggless

Ruby Tuesday Inc. said Aziz Hashim, founder and managing partner of NRD Capital, would serve as interim CEO as the company searches for a permanent successor to Jim Hyatt, who has served as CEO and president.

The Maryville, Tenn.-based casual-dining company, which completed its $335 million going-private sale to Atlanta-based NRD Capital earlier Thursday, said the executive change is effective immediately. Hyatt had served as CEO since April.

“It is our belief that by leveraging the brand’s core strengths – investing in its people and product, exploring new opportunities for growth, and executing operational excellence initiatives across the company – Ruby Tuesday can once again generate excitement with diners,” Hashim said in a statement.

Hashim, who served as chairman of the International Franchise Association from 2016-2017, founded NRD Capital in 2014. He oversees the firm’s strategy and is active in its investments, which include Fuzzy’s Taco Shop, Frisch’s Big Boy, Mike’s Kitchen S.A. and FundRx.

Prior to NRD Capital, Hashim founded NRD Holdings in 1996 as a franchise development and holding company, which included such brands as Popeye’s, KFC, Taco Bell and Domino’s Pizza.

NRD in July said its Frisch’s Big Boy and Fuzzy’s Taco Shop holdings generated $450 million in annual system revenues from 220 locations in 12 states.

As of Dec. 1, Ruby Tuesday owned and franchised 596 Ruby Tuesday restaurants in 41 states, 14 other countries and Guam. Of those, the company owns 541 Ruby Tuesday restaurants and franchises 55 units.

Contact Ron Ruggless at Ronald.Ruggless@knect365.com 

Follow him on Twitter: @RonRuggless

WKS Restaurant Group, the largest El Pollo Loco franchisee, has acquired Pennant Foods Corp. and its 52 Wendy’s in Southern California, the company said this week.

Lakewood, Calif.-based WKS, which now owns more than 180 franchise restaurants that include such other brands as Blaze Pizza, Corner Bakery Café, Denny’s and Krispy Kreme, purchased Pennant from funds managed by Boca Raton, Fla.-based Brockway Moran & Partners Inc.

Brockaway had acquired Knoxville, Tenn.-based Pennant in March 2003.

Terms of the deal were not disclosed, but financing was provided by CapitalSpring, a private-investment firm focused on the restaurant industry.

Roland Spongberg, CEO of WKS, said his company has worked with CapitalSpring on prior acquisitions.

“We have enjoyed a relationship with the firm since 2011,” Spongberg said in a statement, “and their consistent ability to leverage creative financing solutions to meet the needs of our business and our acquisitions makes them a trusted and reliable partner.”

In addition to CapitalSpring, WKS’ existing senior lenders, led by Wintrust Franchise Finance, served as co-lenders on the Pennant deal. Wintrust Franchise Finance is a division of Lake Forest Bank & Trust Co. a Wintrust Community Bank.

“WKS has a long history of growth and operational excellence across multiple concepts and geographies,” said Tee Isenhour, a principal at CapitalSpring, in a news release, “and we look forward to future opportunities together across their brand portfolio.”

Capital Spring has about $1.3 billion in assets under management, representing about 4,000 restaurant locations, said Richard Fitzgerald (left), the company’s co-founder and managing partner, at this week’s ICR Conference.

WKS, founded in 1987, is the largest El Pollo Loco and Krispy Kreme franchise group.

Sheppard, Mullin, Richter & Hampton LLP served as legal advisor to WKS in the transaction. CapitalSpring was represented by Katten Muchin Rosenman LLP.

Contact Ron Ruggless at Ronald.Ruggless@KNect365.com 

Follow him on Twitter: @RonRuggless

UberEats has acquired Momofuku chef David Chang’s Ando in New York City, and the delivery company shut down operations Monday.

Ando, which launched as a digital-only smartphone app-based restaurant in May 2016, has also closed the brick-and-mortar Union Square location that it opened last fall.

“We will no longer be serving customers in New York — online or via our Union Square location — as we will be immediately starting to integrate with UberEats,” Ando posted on its website Monday.

UberEats is the on-demand food-delivery app division of San Francisco, Calif.-based Uber Technologies Inc., the ride-sharing service. The company had not returned messages by press time.

“We are committed to investing in technology that helps consumers, delivery and restaurant partners alike,” Jason Droege, head of Uber Everything, said in a statement to TechCrunch. “Ando’s insights will help our restaurant technology team as we work with our restaurant partners to grow their business.”

Chang created Ando in May 2016 to offer a limited menu of chef-created dishes in parts of Manhattan. The company had worked with Uber for some of its deliveries.

“We’ve worked with Uber to power our delivery from the start, and we’re excited our team and technology will play a role in their vision of building the world’s leading food delivery service going forward,” the company said in its website closure announcement.

Chang was an investor in the earlier meal-delivery service called Maple, which launched in April 2015. That delivery service shut down in May of last year, and some Maple employees were to join London-based Deliveroo, which had similar delivery operations in 12 counties.

Uber, known for its app-based on-demand ride service, has been pushing further into the food-delivery business.

In December, the company said UberEats had passed 46,100 available restaurants, more than doubling the number since October 2016. The service was offered in 71 cities and 24 countries.

Contact Ron Ruggless at Ronald.Ruggless@KNect365.com 

Follow him on Twitter: @RonRuggless

Sentinel Capital Partners has sold Huddle House Inc., the companies said Thursday. Terms of the sale were not disclosed.

The buyer asked not to be disclosed, according to a spokesperson.

The New York City-based private-equity firm acquired Huddle House in 2012.

“Sentinel has been a great partner to Huddle House and over the past six years has helped us set and achieve meaningful strategic milestones,” said Michael Abt, CEO of the Atlanta-based family-dining chain. “Our customers, franchisees, operators and employees are super excited about Huddle House’s future."

In recent years, Huddle House had been in the midst of a turnaround and remodeling program.

“Throughout our ownership, Huddle House has achieved impressive systemwide operational results that have increased efficiency and improved productivity at the individual restaurant level," said Jim Coady, a partner at Sentinel. "Average unit volume increased by 14 percent on our watch, which reflects the commitment and dedication to excellence of the entire Huddle House team."

In 2016, Abt discussed a plan to nearly double the average unit volume of restaurants.

“We’re going to optimize our kitchen design, so the expediting and service areas will be designed to increase throughput capacity and operational efficiency and will use new cooking platforms and technologies,” he told NRN at the time.

Huddle House ranked No. 158 on NRN’s latest Second 100 census and reported U.S. systemwide sales of $240 million for the fiscal year ended April 2017. The chain has 349 units.

In the past year, Sentinel also sold the Checkers/Rally's quick-service brands for $525 million and acquired quick-service seafood purveyor Captain D's. The firm has $2.6 billion of equity capital under management.

Correction: Feb. 1, 2018 This story has been updated with information about the buyer of Huddle House.

Correction: Feb. 1, 2018  An earlier version of this story misstated franchised brands operated by Sentinel Capital Partners. The story has been updated. 

Shareholders of J. Alexander’s Holdings Inc. rejected the company’s proposed acquisition of 99 Restaurants LLC, the company said Thursday, ending the deal announced last August.

The Nashville, Tenn.-based parent to J.Alexander’s, Redlands Grill and Stoney River Steakhouse and Grill restaurants said about 90 percent of outstanding shares were voted, and the election is still to be certified by an independent inspector.

“While we are disappointed that shareholders did not approve this transaction,” said Lonnie Stout, J. Alexander’s CEO and president, in a statement, “we are confident in our overall strategy, our strong culture and our ability to deliver value to shareholders.”

In August, Fidelity National Financial Inc. said its private-equity subsidiary, Fidelity National Financial Ventures LLC, would merge the 106-unit casual-dining Ninety Nine Restaurant & Pub with J Alexander’s in a stock deal.

J. Alexander’s said it would acquire 99 Restaurants from Fidelity in an all-stock deal valued at $199 million. J. Alexander’s planned to create a new class of stock to pay for the merger. As a result, Fidelity subsidiaries Fidelity Newport Holdings and Fidelity National Financial Ventures LLC, or FNFV, will get 52.5 percent of J. Alexander’s stock.

Some shareholders had objected, saying the deal was “overly accommodating” to Fidelity’s interests.

J. Alexander’s Holdings operates 19 J. Alexander’s locations, 12 Redlands Grills, 12 Stoney River restaurants and the single-unit Lyndhurst Grill, all of which are upscale casual-dining restaurants. Most of its restaurants are in the Southeast and Midwest.

Also Thursday, J. Alexander’s announced preliminary unaudited sales for the fiscal year ended Dec. 30. Same-store sales increased 3 percent at J. Alexander’s and 3.8 percent at Stoney River, the company said. No same-store sales figures were provided for Redlands Grill.

Contact Ron Ruggless at Ronald.Ruggless@KNect365.com 

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The foodservice industry’s latest multi-concept operator was born on Monday as Arby’s Restaurant Group Inc. completed a $2.9 billion acquisition of Buffalo Wild Wings Inc. and renamed itself Inspire Brands Inc.

Inspire Brands is owned by Atlanta-based Roark Capital Group. It operates more than 1,700 restaurants and franchises more than 2,900 units as Arby’s and Buffalo Wild Wings, as well as R Taco, formerly known as Rusty Taco, a Mexican street-food concept with 26 locations that Buffalo Wild Wings acquired in 2014. Annual systemwide sales of the three brands exceeded $7.6 billion in 2017, the parent company said.

Inspire Brands is led by Paul Brown, who was Arby’s CEO before he took on the role as CEO of the whole group.

“We believe the time is right to create a different kind of restaurant company — one with a broad portfolio of distinct brands across a full spectrum of restaurant occasions,” Brown said in a release. “Our goal is to build an organization that leverages the benefits of scale, not only to save cost, but also to enable outsized investments in long-term growth initiatives.”

The three brands each occupy distinct segments: Arby’s in quick service, R Taco in fast casual and Buffalo Wild Wings in casual dining.

The release said Inspire aims “to build a family of powerful, distinct restaurant brands that each have high-growth potential, both domestically and internationally. The Inspire organization is designed to enable each individual brand to benefit from and build off the strengths of the others.”

Brown added: “Our family of brands are iconic within their restaurant segments and have succeeded with the help of a strong franchise base, differentiated marketing and, most importantly, delicious food. I’m looking forward to accelerating their growth under our new model.” 

Arby’s announced plans to acquire Buffalo Wild Wings in November 2017. Buffalo Wild Wings shareholders approved the deal on Friday, pricing the company’s shares at $157.

Buffalo Wild Wings had been struggling for some time and estimated a same-store sales decrease of 1.6-1.7 percent for the 2017 fiscal year.

By contrast, Arby’s, has made a dramatic turnaround since Roark acquired the chain in 2011, reporting more than 20 consecutive quarters of same-store sales growth. In 2016, for the first time since 2008, it reported a net increase in unit count.

Inspire Brands will be based in Atlanta, but it will retain a support center in Minneapolis, where Buffalo Wild Wings was formerly headquartered.   

Roark Capital Group also owns CKE Restaurants Holdings Inc. (parent of Hardee’s and Carl’s Jr.), Jim ’N Nick’s Bar-B-Q and Focus Brands Inc. (franchisor of Auntie Anne’s, Carvel, Cinnabon, McAlister’s Deli, Moe’s Southwest Grill and Schlotzsky’s).

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Jollibee Foods Corp. has agreed to acquire an additional 45 percent of Smashburger for $100 million, the companies said Tuesday.

The deal will increase the Pasig, Philippines-based restaurant company’s ownership stake in the Denver-based “better burger” chain to 85 percent. Jollibee acquired 40-percent ownership of Smashburger in October 2015, which then valued the company at $335 million.

“Jollibee has been an invaluable strategic partner to date," said Tom Ryan, Smashburger co-founder and CEO, in a statement. "Our momentum in 2017 around improved guest experience, iconic and record-setting product launches, and innovative marketing provide JFC a tremendously strong brand to enter the North American market.”

Ryan has said the fast-casual chain has been undergoing a“quiet turnaround.”

Over the past year, Smashburger has developed new menu items, focused on value, begun advertising on television and other media, and deployed new technology, all in an effort to increase customer traffic. It is also renegotiating some leases.

Ryan said the efforts helped improve sales through increased traffic. In 2017, the company also launched the Smash Pass, a subscription-model customer frequency program.

Bradford Reynolds, Smashburger’s CFO, said the expanded Jollibee partnership will help the brand grow in Southeast Asia.

“We look forward to building upon our successful relationship to further bolster the brand as an international leader in the better burger segment," Reynolds said.

In the most recent Nation’s Restaurant News Top 200 census, Smashburger ranked No. 120, with $338.3 million in U.S. systemwide sales for the fiscal year ended in December 2016.

Smashburger, founded in 2007, has 360 owned and franchised restaurants in 38 states and nine countries.

As of Dec. 31, Jollibee Foods operated 2,875 restaurants in the Philippines, including 1,062 units of the Jollibee brand, as well as Chowking, Greenwich, Red Ribbon, Mang Inasal and franchised Burger Kings, and 924 restaurants abroad, including in Australia, Bahrain, Brunei, Canada, China, Hong Kong, Indonesia, Korea, Kuwait, Macau, Oman, Qatar, Saudi Arabia, Singapore, the United States and Vietnam.

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Le Duff America Inc. is in the process of selling its Canada-based Timothy’s World Coffee and Mmmuffins concepts to a subsidiary of MTY Food Group Inc., owner of Kahala Brands, the company said Thursday.

Le Duff America, the Dallas-based affiliate of Groupe Le Duff, did not reveal terms of the deal with Montreal-based MTY. The sale will be completed in April.

The deal covers Timothy’s seven corporate and 30 franchised locations in Canada and two licensed locations in the United States and Mmmuffins’ four Canadian franchised locations, Le Duff said.

“The sale of Timothy’s and Mmmuffins is another important step in sharpening our focus as a French company and preparing for the upcoming U.S. launch of our legacy Brioche Dorée brand,” said Olivier Poirot, Le Duff America CEO, in a statement.

“As with our recent sale of Bruegger’s Bagels, we have found an excellent organization to steward the future of Timothy’s and Mmmuffins brands while continuing to strengthen our position for rapid growth with our French-heritage brands,” he said. 

Le Duff America acquired Timothy’s and Mmmuffins as part of its 2011 purchase of Bruegger’s Bagels, which it sold last year to Caribou Coffee. Caribou Coffee is owned by JAB Holding Co., which also owns Einstein Noah Restaurant Group and Panera Bread Co.

MTY has acquired a number of U.S. brands over the past two years. In November, the company agreed to buy Culver City, Calif.-based CB Franchise Systems LLC, parent to The Counter and Built Custom Burgers. That followed a $300 million acquisition in May 2016 of Scottsdale, Ariz.-based Kahala Corp., parent to Blimpie, Cold Stone Creamery, Pinkberry, Planet Smoothie and Tasti D-Lite.

Le Duff said its Montreal office would continue to support the Au Pain Doré brand and Brioche Dorée cafés in Montreal and Toronto, as well as airport locations in British Columbia, Alberta and Saskatchewan.

Meanwhile, Le Duff America said it would continue to focus on its French-oriented Brioche Dorée, La Madeline French Bakery & Cafe and Mimi’s concepts in the United States.

Julie Hauser-Blanner, who joined Le Duff America in mid-2017 as the first U.S.-based Brioche Dorée president, said the MTY deal clears the path for a full launch of Brioche Dorée in the U.S.

“My top priority is to make this iconic global brand relatable to the U.S. consumer while maintaining the highest standards of guest experience and exceptional food quality that have made it the world leader in French-style fast food,” Hauser-Blanner said.

Le Duff America Inc. is owned by Rennes, France-based Groupe Le Duff, which has nearly 2,000 bakery-cafés worldwide.

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Rhône Capital will acquire Fogo de Chão Inc. in a cash deal valued at $560 million, the Brazilian steakhouse chain said Tuesday.

The Dallas-based casual-dining chain said stockholders will receive $15.75 per share, representing a 25.5-percent premium on its Friday closing price of $12.55 per share. The company went public in June 2015 with an $88 million IPO.

“We are excited to enter into a new chapter for the company and confident that Rhône will be an invaluable partner as they have a proven and distinguished track record of supporting and driving profitable growth for companies around the world,” said Larry Johnson, Fogo de Chão CEO, in a statement.

The deal has been approved by the chain’s board members, executives and investment funds affiliated with Thomas H. Lee Partners LP, all of which own more than 60 percent of Fogo de Chão shares. The deal is expected to be completed during the second quarter.

“We look forward to collaborating with Fogo and its talented management team to continue the growth of this exceptional business,” said Eytan Tigay, managing director of Rhône Capital, which is based in New York City. “We believe our firm’s global experience, relationships, and longstanding and expanding presence in Brazil is a natural complement to the company and will serve to facilitate Fogo’s domestic and international expansion plans.” 

Jefferies LLC acted as financial advisor to Fogo de Chão. Davis Polk & Wardwell LLP and Weil, Gotshal & Manges LLP served as legal counsel to Fogo and its board. J.P. Morgan Securities LLC served as financial adviser and Sullivan & Cromwell LLP served as legal advisor to Rhône Capital. Credit Suisse and Wells Fargo Bank, National Association are providing financing for the transaction. 

Fogo de Chão, which first opened in Brazil in 1979, operates 38 restaurants in the United States, nine locations in Brazil, two joint-venture restaurants in Mexico and two joint-venture units in the Middle East, in Jeddah, Saudi Arabia, and Dubai, United Arab Emirates.

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Modern Market has been acquired by Butterfly, a Los Angeles-based private-equity firm, according to a press release Tuesday. Terms of the deal were not disclosed.

Denver-based Modern Market operates 28 fast-casual restaurants in Colorado; Texas; Arizona; Washington, D.C.; and Maryland. The menu centers around healthful, sustainably sourced food. The chain primarily serves salads, sandwiches, soups, pizza and plated meals made with sustainable, naturally raised protein and a choice of two sides.

Recent winter menu additions include a truffled potato pizza; curry salmon bowl; barbecue pork sandwich; and “Superduperfood Salad” with hemp-seed granola, raspberry-chia seed dressing and baby greens. The dishes are priced between $9 and $14.

Butterfly co-founder Adam Waglay praised Modern Market co-founders Anthony Pigliacampo and Rob McColgan in a press release:

“By combining their unique technical backgrounds in engineering and business with a deep understanding of the most important trends impacting food today, Anthony and Rob have built a highly scalable concept with an incredibly loyal following. We look forward to helping Modern Market share its commitment to delicious, healthy, clean food at an accessible price point with an ever-expanding national audience.”

Butterfly was formed by executives from the private-equity firms KKR & Co. LP and Vista Equity Partners to focus on the food sector, including agriculture, aquaculture, food and beverage products, food distribution, and foodservice. In June 2016, shortly after it was formed, the firm invested in Lemonade, the Los Angeles-based fast-casual chain. Last month, it acquired Pacifico Aquaculture, based in Ensenada, Mexico, which raises striped bass.

Modern Market was founded as Modmarket in Boulder, Colo., in 2009. The chain changed its name in November 2015, when it had 14 units.

Another Butterfly co-founder, Dustin Beck, said Modern Market’s food and service have growing appeal and potential for expansion.

“Modern Market’s innovative menu, emphasis on convenience, and ability to meet any dietary need result in a concept with immense, broad appeal and significant room to grow,” he said. “We believe that Modern Market’s offering is increasingly representative of the way that modern restaurant-goers prefer to eat, and we’re excited to support Anthony and Rob in leading the change in the fast-casual space.”

Modern Market’s co-founders said they looked forward to working with Butterfly:

“Butterfly brings years of industry experience and know-how to the table. We are thrilled to partner with Adam, Dustin and the rest of the Butterfly team as Modern Market moves toward its next phase of growth. We’re confident that Butterfly’s deep expertise in fast-casual connectivity throughout the broader food sector will help us to expand and to further our stated mission of serving amazing, healthy food to as many people as possible.”

Contact Bret Thorn at bret.thorn@knect365.com 

Follow him on Twitter: @foodwriterdiary