Ignite Restaurant Group (Nasdaq: IRG) has agreed to acquire Romano’s 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.”
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.
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.