$54 Million Accretive Transaction Expected to Close in July
Diversified Restaurant Holdings, Inc., the creator, developer and operator of the unique, full-service, ultra-casual restaurant and bar Bagger Dave’s Burger Tavern and one of the largest franchisees for Buffalo Wild Wings, announced today its intention to acquire eighteen Buffalo Wild Wings restaurants in the St. Louis area for $54 million. Buffalo Wild Wings Inc. has already provided the waiver of its Right of First Refusal. The acquisition will allow DRH to own the entire St. Louis market and also provide for the opportunity to open new BWW stores.
Subject to customary closing conditions, the accretive transaction is expected to close in July and is conditioned upon availability of financing. DRH has engaged Citizens Bank, its senior lender, to lead a bank syndicate in order to finance 100% of the transaction with a senior-secured debt facility. DRH is confident that the facility will close and the resulting leverage and coverage ratios will remain comfortably within the Company’s covenant limits. The Company intends to update its annual guidance upon the closing of the transaction.
Michael Ansley, President and CEO of DRH, commented, “We are delighted to be acquiring 18 highly-successful and very profitable BWW restaurants in the St. Louis area. We expect they will be immediately accretive to earnings, reinforce our already strong leadership position in the BWW system, and allow us to expand into a new market with opportunities for future growth and in close proximity to our core geography. Throughout our history, we have proven our ability to leverage our ‘best practices’ expertise, G&A infrastructure and systems to drive higher unit volumes and stronger profitability at acquired BWW restaurants in Indiana, Illinois and Florida. We are therefore highly confident that we can apply our know-how to this transaction as well, and in doing so, enhance shareholder value.”