$200M purchase comes after J. Alexander’s strategic review, start of sales recovery
SPB Hospitality LLC, the parent of Gordon Biersch Brewery and Logan’s Roadhouse, has acquired J. Alexander’s Holdings, parent of several upscale restaurant brands, including J. Alexander’s Restaurant and Stoney River Steakhouse, for approximately $200M.
Shareholders of J. Alexander’s common stock will receive $14 per share, a premium of 14% to the price of the stock July 1, 2021. The payment per share also represents a premium of 78% to the closing share price when the company announced it had completed its strategic review (February 9, 2021).
J. Alexander’s had tackled many challenges during the pandemic as it faced dining room restrictions and consumer reticence to dine out. Its fine-dining and polished-upscale restaurants took a beating, but most recently had rebounded to near pre-pandemic levels. During the first quarter, net sales were up 0.7% from the prior year, totaling $57.4M.
Q1 average weekly sales at J. Alexander’s/Grill restaurant concepts were up 3.1% from last year, while at Stoney River Steakhouse, they were up 4.0%.
The deal was backed by a number of company officers, directors and shareholders, as well as Newport Global Opportunities Fund I-A LP and Ancora Holdings LLC, having 20% of the outstanding shares of common stock.
Ancora Holdings had made a a takeover bid for the company in 2019 as an activist shareholder.
J. Alexander’s and SPB Hospitality expect the transaction to be completed early Q4 2021, subject to approval by J. Alexander’s shareholders, the Hart-Scott-Rodino Antitrust Improvements Act of 1976 waiting period, and any additional customary closing conditions.
“Our board evaluated a full range of strategic, financial and capital structure alternatives to best serve the interests of our shareholders,” said Lonnie J. Stout II, executive chairman of the J. Alexander’s Board of Directors. “After a thorough evaluation and strategic process, the Board is confident that this transaction provides excellent value to our shareholders.”
J. Alexander’s President and Chief Executive Officer Mark A. Parkey said the transaction would provide a “significant premium to our shareholders.”
Piper Sandler & Co. acted as financial advisor to J. Alexander’s and its Board of Directors, and Bass, Berry & Sims PLC provided legal counsel. J.P. Morgan Securities LLC and Configure Partners LLC served as financial advisors to SPB Hospitality, and Hunton Andrews Kurth LLP served as legal counsel.
“We are honored to acquire these storied brands and look forward to welcoming this experienced team into the SPB family,” said Jim Mazany, SPB Hospitality chief executive. “Lonnie and Mark are true pioneers and respected leaders in the industry. Partnering with the company to harness the power of these brands is an incredible opportunity.”
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