TGI Fridays has agreed to be acquired by blank-check company Allegro Merger for $30 million in cash and stock and the assumption of $350 million in debt.
The deal is structured as a merger that will result in Fridays again becoming a public company.
The casual brand’s current principal owners, investment firms TriArtisan Capital and MFP Partners, have agreed to tender their majority stake in exchange for shares in Allegro, a public company. An additional $2 million in Allegro shares will be paid to Fridays’ shareholders if the chain hits certain post-closing performance thresholds, which were not disclosed.
The deal’s announcement indicates that Fridays CEO Ray Blanchette will retain his position.
The Fridays chain currently consists of 396 domestic restaurants and 442 branches outside of the United States. About 83% of the chain is franchised, and the purchase announcement notes that Fridays collects a significant volume of revenues from the licensing of its name to consumer retail products, including drink mixes.
Systemwide sales topped $2 billion on average unit volumes of $2.7 million for the fiscal year ended Sept. 30, the deal participants said.
“Fridays’ highly predictable stream of franchise and licensing revenue is very attractive and we believe that Fridays provides a compelling value to our shareholders,” Allegro CEO Eric Rosenfeld said in a statement.
Allegro was formed specifically to buy other companies, using funds generated through a public stock offering.
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