Ryans Restaurant (NASDAQ:RYAN)
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Ryan's Shareholders to Receive $16.25 Per Share in Cash
Buffets, Inc., a leading owner and operator of buffet-style
restaurants, and Ryan's Restaurant Group, Inc. (Nasdaq: RYAN), the
leading publicly traded buffet operator, today announced the signing
of an agreement under which a subsidiary of Buffets will merge with
Ryan's in a cash transaction valued at approximately $876 million,
including debt that will be assumed or repaid at or prior to closing.
Buffets is owned by an investment partnership organized by
Caxton-Iseman Capital, Inc., a New York-based private equity firm, and
the senior management of Buffets.
The transaction will create the nation's largest buffet restaurant
chain and one of the five largest companies in the casual and
mid-scale dining segment. The combined company will have annual
revenues of more than $1.7 billion, a national footprint, and operate
approximately 675 restaurants principally under the well-respected
Ryan's(R) Grill, Buffet & Bakery, Fire Mountain(R), Old Country
Buffet(R) and HomeTown Buffet(R) brands.
Under terms of the agreement, which has been unanimously approved
by the boards of directors of both companies, Ryan's shareholders will
receive $16.25 in cash for each common share they own, representing an
approximate 45% premium over Ryan's closing share price on July 24,
2006.
The combined company will continue to be called Buffets, Inc. and
will continue to be headquartered in Eagan, Minnesota. Ryan's will
operate as a separate division of Buffets and will continue to be
based in Greer, South Carolina. R. Michael Andrews, Chief Executive
Officer of Buffets, will continue to serve in this capacity for the
combined company, which will have approximately 43,000 employees.
Mr. Andrews said: "Our combination with Ryan's is an outstanding
opportunity for Buffets, as we are combining two complementary
businesses from a geographic, operational and cultural perspective.
Ryan's leading position in the South will balance Buffets' leading
position in the North and West, allow for continued brand development
in our core markets and provide further opportunities for geographic
expansion. As one company, we will capitalize on opportunities in
purchasing, marketing and restaurant operations. Most importantly, the
people of both companies - from senior management to the store level
staff - share a deep commitment to creating positive dining
experiences for our customers on a daily basis, and providing an
enjoyable and rewarding workplace for our employees.
"We are excited about the opportunity to work together with the
Ryan's team to apply best practices from each company across our
organization. We expect that the result of our efforts will be a
national restaurant chain even better positioned to provide its
millions of customers with delicious meals at a great value in a
family oriented environment," Mr. Andrews concluded.
Charles D. Way, Chief Executive Officer of Ryan's, said: "Since
opening its first restaurant in 1978, Ryan's has strived to serve
great meals to our loyal customers, to be a great place for our
employees to work and to create value for our shareholders. In joining
forces with Buffets, we have found a partner committed to each of
these principles. Buffets respects the heritage of our brands and,
like Ryan's, has a long history of great customer service and treating
its employees as partners in its success. Importantly, we believe this
transaction will deliver substantial value to our shareholders, whom
we thank for their support. Our entire team is committed to working
with the Buffets leadership to complete a successful integration."
Steven M. Lefkowitz, a Managing Director of Caxton-Iseman, said:
"We are pleased to back this outstanding management team led by Mike
Andrews in an exciting growth initiative. The Ryan's management team
has done an impressive job developing two outstanding brands, and we
look forward to building on their success. We believe the combination
of these businesses brings together the assets, skills and resources
to create a new entity that is greater than the sum of its parts. Mike
and his colleagues have our full support as they work to further
strengthen the company for the benefit of our employees, customers and
their communities."
Completion of the transaction, which is expected to occur in the
fourth quarter of 2006, is subject to approval by Ryan's shareholders,
regulatory approvals, receipt of financing and other customary closing
conditions.
It is anticipated that the transaction will be funded through a
combination of bank debt, senior subordinated debt and real estate
financing, which will result in a full refinancing of Buffets' and
Ryan's existing debt. The debt financing for the transaction has been
committed by Credit Suisse Securities (USA) LLC and UBS Securities
LLC, and the real estate financing has been committed by affiliates of
Fortress Investment Group LLC.
Buffets' financial advisor with respect to this transaction is
Berenson & Company, LLC, and its legal advisor is Paul, Weiss,
Rifkind, Wharton & Garrison LLP. Ryan's financial advisor with respect
to this transaction is Brookwood Associates, LLC, and its legal
advisor is Wyche, Burgess, Freeman & Parham, P.A.
About Buffets
Buffets currently operates 337 restaurants in 33 states comprised
of 328 buffet restaurants and nine Tahoe Joe's Famous Steakhouse(R)
restaurants. The buffet restaurants are principally operated under the
Old Country Buffet(R) or HomeTown Buffet(R) brands. Buffets also
franchises 18 buffet restaurants in seven states.
About Ryan's Restaurant Group
Ryan's Restaurant Group, Inc. (Nasdaq: RYAN), headquartered in
Greer, South Carolina, is a leading restaurant company operating
approximately 340 Ryan's(R) Grill, Buffet & Bakery and Fire
Mountain(R) restaurants in 23 states primarily in the Southern and
Midwestern United States. Ryan's employs approximately 23,000 team
members and serves more than 110 million customers annually.
About Caxton-Iseman Capital
Caxton-Iseman Capital, Inc. is a New York-based private equity
firm. In addition to Buffets, its portfolio companies include Ply Gem
Industries, Inc., a manufacturer of vinyl building products;
Electrograph Systems, Inc., a leading national value-added distributor
of display technology solutions; and Prodigy Health Group, Inc., a
health care services company. Caxton-Iseman's investment vehicles have
available capital in excess of $2 billion.
Cautionary Language Concerning Forward-Looking Statements
Statements herein regarding the proposed transaction between
Buffets, Inc., a subsidiary of Buffets Holdings, Inc. and Ryan's
Restaurant Group, Inc., future financial and operating results,
benefits and synergies of the transaction, future opportunities for
the combined company and any other statements about future
expectations constitute forward looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. Such
statements are based upon current beliefs and expectations and are
subject to significant risks and uncertainties. There are a number of
important factors that could cause actual results or events to differ
materially from those indicated by such forward looking statements,
including: the ability to obtain governmental approvals of the
transaction on the proposed terms and schedule and the ability of
Buffets, Inc. to achieve synergies in connection with the merger and
the integration of Ryan's Restaurant Group, Inc. successfully into its
business. Each of Buffets Holdings, Inc., Buffets, Inc. and Ryan's
Restaurant Group, Inc. disclaims any intention or obligation to update
or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Additional factors that may affect future results are contained in
each company's filings with the Securities and Exchange Commission
("SEC"), including Buffets Holdings, Inc.'s Annual Report on Form 10-K
for the year ended June 29, 2005 and Ryan's Restaurant Group, Inc.'s
Annual Report on Form 10-K for the year ended December 28, 2005, each
of which is available at the SEC's Web site http://www.sec.gov. The
information set forth herein speaks only as of the date hereof, and
any intention or obligation to update any forward looking statements
as a result of developments occurring after the date hereof is hereby
disclaimed.
Important Information Will Be Filed with the SEC
In connection with the proposed transaction, Ryan's Restaurant
Group, Inc. plans to file with the SEC a Proxy Statement. Investors
and security holders of Ryan's Restaurant Group, Inc. are urged to
read the Proxy Statement and any other relevant documents filed with
the SEC when they are available because they will contain important
information about Ryan's Restaurant Group, Inc., the proposed merger
and related matters. The final Proxy Statement will be mailed to
stockholders of Ryan's Restaurant Group, Inc. Investors and security
holders of Ryan's Restaurant Group, Inc. will be able to obtain copies
of the Proxy Statement, when they become available, as well as other
filings with the SEC that will be incorporated by reference into such
documents, containing information about Ryan's Restaurant Group, Inc.,
without charge, at the SEC's Internet site (http://www.sec.gov). These
documents may also be obtained for free from Ryan's Restaurant Group,
Inc. by directing a request to Ryan's Restaurant Group, Inc., Investor
Relations, PO Box 100, Greer, SC 29652, or at Ryan's Restaurant Group,
Inc.'s Investor Relations page on its corporate website at
www.ryans.com.
Participants in Solicitation
Ryan's Restaurant Group, Inc. and its respective directors and
executive officers and other members of management and employees may
be deemed to be participants in the solicitation of proxies from
Ryan's Restaurant Group, Inc.'s stockholders in respect of the
proposed merger. Information regarding Ryan's Restaurant Group, Inc.'s
directors and executive officers is available in Ryan's Restaurant
Group, Inc.'s proxy statement for its 2006 annual meeting of
stockholders, which is filed with the SEC. Additional information
regarding the interests of such potential participants will be
included in the proxy statement and the other relevant documents filed
with the SEC when they become available.