Report says P.F. Chang’s to be sold to investment firms

TriArtisan Capital Partners and Paulson & Co. will buy the Asian casual-dining chain from Centerbridge, according to Bloomberg.
Photograph: Shutterstock

Private-equity firms TriArtisan Capital Partners and Paulson & Co. Inc. have agreed to buy the heavily indebted P.F. Chang’s from Centerbridge Partners in a $700 million deal, according to a report by Bloomberg on Thursday, citing a notice to investors.

The deal, expected to close in the first three months of the year, is expected to take out all of the company’s $675 million in debt.

Chang’s has $375 million in secured debt and another $300 million in unsecured bonds.

The agreement comes just days after reports surfaced that the company was nearing a sale to the two private-equity firms.

Representatives for P.F. Chang’s did not respond to requests for comment Friday morning.

Centerbridge paid $1.1 billion for P.F. Chang’s and its fast-casual sister chain, Pei Wei Asian Diner, in 2012.

The company put itself up for sale last year after saying that it had received “multiple, unsolicited indications of interest.”

The previous year, however, Centerbridge split the two chains and moved Pei Wei to Texas in what was viewed as a strategy to make P.F. Chang’s more marketable.

An upscale Asian casual-dining chain, Chang’s growth has largely stagnated in recent years. System sales were just under $900 million in 2017, according to Technomic data, and the company operated 218 U.S. locations plus 82 restaurants outside the U.S. Domestic system sales have averaged a 0.7% annual decline over a five-year period.

But the company has found some room for growth internationally. The number of international locations grew by 15% in 2017.

Based on a 2017 lender presentation, the $700 million deal value would give the company a valuation multiple of just more than 5 times earnings before interest, taxes, depreciation and amortization.

The reported sale of P.F. Chang’s comes during a period of heavy merger and acquisition activity in the restaurant space. More than 70 deals for restaurant chains have been completed over the past two years, and the flow of acquisitions is expected to maintain that brisk pace in 2019.

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