Back Yard Burgers Agrees to Be Acquired by Private Equity Group
11 Juin 2007 - 12:52PM
Business Wire
Back Yard Burgers, Inc. (NASDAQ:BYBI) announced today that it has
entered into a definitive merger agreement with BBAC, LLC and its
wholly-owned subsidiary, BBAC Merger Sub, Inc. BBAC, LLC is an
investment partnership managed by Cherokee Advisors LLC, an
Atlanta-based firm, and its principal investors include Reid M.
Zeising of Cherokee Advisors, Pharos Capital Group, LLC, based in
Nashville, Tennessee, and C. Stephen Lynn, former Chairman and CEO
of Shoney�s, Inc. and Sonic Corp. Under the terms of the merger
agreement, the holders of Back Yard Burgers common stock and
preferred stock will be entitled to receive $6.50 per share in
cash, which represents a 29% premium above the closing price of
$5.05 per share on June 8, 2007, the last trading day before this
announcement. The total value of the transaction, including debt to
be repaid by BBAC, is approximately $38 million. Back Yard Burgers�
Board of Directors, based upon the recommendation of a special
committee of independent, non-management directors who negotiated
the merger agreement, has unanimously approved the merger agreement
and has recommended that Back Yard Burgers� stockholders vote in
favor of the merger. Officers and directors owning approximately
26.74% of the outstanding capital stock have entered into voting
agreements with BBAC to vote their Back Yard Burgers stock in favor
of the transaction. The closing of the transaction is subject to,
among other things, the approval by the holders of a majority of
the outstanding common stock and preferred stock of Back Yard
Burgers, voting together as a single class, and to a financing
contingency by BBAC. BBAC has received equity and debt financing
commitments for the full amount of the merger consideration,
subject to entering into definitive financing agreements and
satisfaction of other customary closing conditions. The transaction
is expected to be completed in the third quarter of 2007, dependent
on the completion of SEC filings and the timing of the Back Yard
Burgers stockholders meeting at which the merger will be voted
upon, as well as other factors. Upon completion of the transaction,
Back Yard Burgers will become a privately held company, and its
common stock will no longer be publicly traded. Lattie Michael,
Chairman and CEO of Back Yard Burgers, said, �We are very excited
to be able to announce this agreement after many months of
discussions with BBAC. We believe this transaction brings real
value to our stockholders, franchisees, customers and employees.
For our stockholders, the $6.50 share price is significantly higher
than the market price of our shares over the past two years. For
our franchisees, the management team of BBAC, headed by Steve Lynn,
has a proven track record in the quick service restaurant industry
for growing proprietary brands. The Back Yard Burgers brand is
unique in our industry, and I am confident that under Steve�s
leadership, the brand will be taken to a much higher level. The
focus on our quality offerings will bring the Back Yard Burgers
brand to many new customers who will come to appreciate our
great-tasting food, as our existing customers already do.� Steve
Lynn, CEO of BBAC, said, �We are excited at the prospect of adding
our team�s expertise to the wonderful chain that the Back Yard
Burgers family has created since 1987.� Chairman of BBAC, Reid M.
Zeising, added, �Our acquisition of Back Yard Burgers will enable
us to focus on extending a great legacy brand. Back Yard Burgers
represents a rare combination of niche status in QSR along with a
strong regional growth opportunity.� Morgan Keegan and Company,
Inc. acted as financial advisor to the Back Yard Burgers Board of
Directors in connection with the transaction and provided a
fairness opinion to the Board of Directors of Back Yard Burgers.
About Back Yard Burgers Back Yard Burgers operates and franchises
quick-service restaurants in 20 states, primarily in markets
throughout the Southeast region of the United States. The
restaurants specialize in charbroiled, freshly prepared,
great-tasting food. As its name implies, Back Yard Burgers strives
to offer the same high-quality ingredients and special care
typified by outdoor grilling in the backyard. Its menu features
made-to-order gourmet Black Angus hamburgers and chicken sandwiches
charbroiled over an open flame, fresh salads, chili and other
specialty items, including hand-dipped milkshakes, fresh-made
lemonade and fresh-baked cobblers. About BBAC, LLC BBAC, LLC is an
Atlanta-based investment group and affiliate of Cherokee Advisors,
LLC. BBAC�s board of managers representing 60 years of combined
restaurant and retail experience is leading this effort: Reid M.
Zeising, Managing Partner of Cherokee Advisors LLC, C. Stephen
Lynn, former Chairman and CEO of Sonic Corporation and Shoney�s
Inc., J. Michael McCarthy, former EVP and CFO of Waffle House, D.
Robert Crants III, co-founder and managing partner of Pharos
Capital Group, LLC, an investment advisory firm, and Dale E. Jones,
managing partner, Heidrick & Struggles. About the Transaction
In connection with the proposed merger, Back Yard Burgers will file
a proxy statement with the Securities and Exchange Commission.
INVESTORS AND SECURITY HOLDERS ARE STRONGLY ADVISED TO READ THE
PROXY STATEMENT WHEN IT BECOMES AVAILABLE, BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION. Investors and security holders may obtain a
free copy of the proxy statement (when available) and other
documents filed by Back Yard Burgers, Inc. at the Securities and
Exchange Commission�s Web site at http://www.sec.gov. The proxy
statement and such other documents may also be obtained for free by
directing such request to Back Yard Burgers, Inc., Investor
Relations, 1657 N. Shelby Oaks Drive, Memphis, Tennessee 38134,
telephone: (901) 367-0888 or on the investor relations page of Back
Yard Burgers� website at http://www.backyardburgers.com. Back Yard
Burgers and its directors, executive officers and certain other
members of its management and employees may be deemed to be
participants in the solicitation of proxies from its stockholders
in connection with the proposed merger. Information regarding the
interests of Back Yard Burgers� participants in the solicitation
will be included in the proxy statement relating to the proposed
merger when it becomes available. Forward-looking Statements
Certain statements contained in this press release are
�forward-looking statements� within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Back Yard Burgers
intends these forward-looking statements to be covered by the safe
harbor provisions established by the Private Securities Litigation
Reform Act of 1995. This press release contains forward-looking
statements within the meaning of the Securities Exchange Act of
1934, as amended. These forward-looking statements include
statements regarding expectations as to the completion of the
merger and the other transactions contemplated by the merger
agreement. Investors are cautioned that forward-looking statements
are not guarantees of future performance or results and involve
risks and uncertainties that cannot be predicted or quantified and,
consequently, the actual performance of Back Yard Burgers may
differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include,
but are not limited to, the following factors, as well as other
factors described from time to time in our reports filed with the
Securities and Exchange Commission (including the sections entitled
�Risk Factors� and �Management�s Discussion and Analysis of
Financial Condition and Results of Operations� contained therein):
the occurrence of any event, change or other circumstances that
could give rise to the termination of the merger agreement with
BBAC, LLC and BBAC Merger Sub, Inc.; the outcome of any legal
proceedings that may be instituted against the Company related to
the merger agreement; the inability to complete the merger due to
the failure to obtain stockholder approval for the merger or the
failure to satisfy other conditions to completion of the merger,
including the failure to obtain the necessary financing
arrangements set forth in the debt and equity commitment letters
delivered pursuant to the merger agreement; risks that the proposed
transaction disrupts current plans and operations; the potential
difficulties in employee retention as a result of the merger; and
the impact of the indebtedness to be incurred to finance the
consummation of the merger. Any forward-looking statements are made
pursuant to the Private Securities Litigation Reform Act of 1995
and, as such, speak only as of the date made. Back Yard Burgers,
Inc. disclaims any obligation to update the forward-looking
statements. You are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date stated,
or if no date is stated, as of the date of this press release.
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