Fogo de Chão, Inc. (“Fogo” or the “Company”) (NASDAQ:FOGO) today
announced an agreement to be acquired by investment entities
affiliated with Rhône Capital (together with its affiliates,
“Rhône”). Under the terms of the agreement, Rhône will acquire the
Company in an all cash transaction valued at $560 million. The
Company’s stockholders will receive $15.75 per share, representing
a 25.5 percent premium to the closing share price of the Company’s
shares on February 16, 2018.
“After a thorough evaluation of the options
available, the Board of Directors is confident that this
transaction will provide Fogo a significant opportunity to realize
the highest value for our stockholders while providing the best
path forward for the Fogo de Chão brand, employees, and loyal
customers,” said Larry Johnson, Chief Executive Officer of Fogo de
Chão, Inc. “We are excited to enter into a new chapter for the
Company and confident that Rhône will be an invaluable partner as
they have a proven and distinguished track record of supporting and
driving profitable growth for companies around the world.”
The transaction is the result of a comprehensive
strategic alternatives review process taken by the Company’s Board
of Directors. The transaction has been unanimously approved by
Fogo’s Board of Directors. Funds affiliated with Thomas H. Lee
Partners, L.P. and certain of Fogo’s directors and executive
officers, which collectively hold more than 60 percent of Fogo’s
shares, have approved the transaction by written consent. The
acquisition is expected to be completed during the second calendar
quarter of 2018, subject to regulatory approvals and other
customary closing conditions.
“We look forward to collaborating with Fogo
and its talented management team to continue the growth of this
exceptional business. The Fogo experience offers consumers an
unsurpassed combination of quality and value in an authentic
Brazilian churrascaria environment. We believe our firm’s
global experience, relationships, and longstanding and expanding
presence in Brazil is a natural complement to the Company and will
serve to facilitate Fogo’s domestic and international expansion
plans. We look forward to working with Fogo’s management team to
drive value for the Company, employees, and customers in this new
chapter for the brand,” said Eytan Tigay, Managing Director of
Rhône.
Jefferies LLC acted as financial advisor to Fogo
de Chão. Davis Polk & Wardwell LLP and Weil, Gotshal &
Manges LLP served as legal counsel to Fogo and its Board of
Directors. J.P. Morgan Securities LLC served as financial advisor
and Sullivan & Cromwell LLP served as legal advisor to Rhône.
Credit Suisse and Wells Fargo Bank, National Association are
providing financing for the transaction.
About Fogo de ChãoFogo de Chão (fogo-dee-shown)
is a leading Brazilian steakhouse, or churrascaria, which has
specialized for nearly 40 years in fire-roasting high-quality meats
utilizing the centuries-old Southern Brazilian cooking technique of
churrasco. Fogo delivers a distinctive and authentic Brazilian
dining experience through the combination of high-quality Brazilian
cuisine and a differentiated service model known as espeto corrido
(Portuguese for "continuous service") delivered by gaucho chefs.
Fogo offers its guests a tasting menu of a variety of meats
including beef, lamb, pork and chicken, simply seasoned and
carefully fire-roasted to expose their natural flavors, a gourmet
Market Table with seasonal salads, soup and fresh vegetables,
seafood, desserts, signature cocktails and an award-winning wine
list. The first Fogo de Chão opened in Brazil in 1979. The Company
currently operates 38 restaurants in the United States, 9 in
Brazil, two joint venture restaurants in Mexico, and two joint
venture restaurants in the Middle East (Jeddah, Saudi Arabia and
Dubai). Visit FOGO.com for more information.
About RhôneWith over 20 years
of investing experience, Rhône is a global alternative investment
management firm with more than $5 billion in assets under
management. The firm focuses its private equity investments in
market leading businesses with a pan-European or transatlantic
presence and global growth opportunities. Rhône, which is currently
investing capital from its fifth private equity fund, has invested
in a diversified portfolio of companies including those in the
aviation, chemical, consumer product, food, packaging, retail,
specialty material, security, business services and transportation
sectors.
Important Information For
Stockholders
Fogo will prepare an information statement on
Schedule 14C for its stockholders with respect to the approval of
the transaction described herein. When completed, the information
statement will be mailed to Fogo’s stockholders. Fogo may be filing
other documents with the SEC as well. Stockholders will be able to
obtain free copies of these documents (if and when available) and
other documents filed with the SEC by Fogo de Chão through the
website maintained by the SEC at http://www.sec.gov. Copies
of the documents filed with the SEC by Fogo de Chão will be
available free of charge on Fogo de Chão’s internet website at
https://fogodechao.com/ or by contacting Fogo de Chão’s Investor
Relations by phone at (972) 361-6225.
Forward Looking Statements
Certain statements in this communication
regarding the proposed transaction between Fogo de Chão and Rhône
are “forward-looking” statements. The words “anticipate,”
“believe,” “ensure,” “expect,” “if,” “intend,” “estimate,”
“probable,” “project,” “forecasts,” “predict,” “outlook,” “aim,”
“will,” “could,” “should,” “would,” “potential,” “may,” “might,”
“anticipate,” “likely” “plan,” “positioned,” “strategy,” and
similar expressions, and the negative thereof, are intended to
identify forward-looking statements. These forward-looking
statements, which are subject to risks, uncertainties and
assumptions about Fogo de Chão and Rhône, may include projections
of their respective future financial performance, their respective
anticipated growth strategies and anticipated trends in their
respective businesses. These statements are only predictions
based on current expectations and projections about future
events. There are important factors that could cause actual
results, level of activity, performance or achievements to differ
materially from the results, level of activity, performance or
achievements expressed or implied by the forward-looking
statements, including the risk factors set forth in Fogo de Chão’s
most recent report on Form 10-K, Form 10-Q and other documents on
file with the SEC and the factors given below:
- failure of Rhône to obtain the financing required to consummate
the proposed transaction;
- the failure to consummate or delay in consummating the proposed
transaction for other reasons;
- the timing to consummate the proposed transaction;
- the risk that a condition to closing of the proposed
transaction may not be satisfied;
- the risk that a regulatory approval that may be required for
the proposed transaction is delayed, is not obtained, or is
obtained subject to conditions that are not anticipated;
and
- the diversion of management time to transaction-related
issues.
Fogo de Chão’s forward-looking statements are
based on assumptions that Fogo de Chão believes to be reasonable
but that may not prove to be accurate. Neither Fogo de Chão nor
Rhône can guarantee future results, level of activity, performance
or achievements. Moreover, neither Fogo de Chão nor Rhône
assumes responsibility for the accuracy and completeness of any of
these forward-looking statements. Fogo de Chão and Rhône
assume no obligation to update or revise any forward-looking
statements as a result of new information, future events or
otherwise, except as may be required by law. Readers are
cautioned not to place undue reliance on these forward-looking
statements that speak only as of the date hereof.
Contacts:
Media:ICR for
Fogo de ChãoAlecia Pulman/Kate Ottavio
KentFogoPR@icrinc.com(646) 277-1200
Brunswick Group For Rhône Brian
Buckley/Charles Pretzlik+44 20 7404 5959E-mail:
bbuckley@brunswickgroup.com / cpretzlik@brunswickgroup.com
Investors: ICRIR@fogodechao.com
(972) 361-6225
FOGO DE CHAO, INC. (NASDAQ:FOGO)
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