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Bojangles to be plucked by Durational and Jordan
Posted on Wednesday, 07 November 2018 13:45
Durational Capital Management and the Jordan Company are taking US fried chicken and biscuit chain private for a premium of USD 593.73 million.
News of the purchase increased the target’s shares by 1.3 per cent to USD 16.01 on 5th November, giving the company a market capitalisation of USD 590.41 million.
William Kussel, director of Bojangles, said the sale follows months of exploring other possible options for the business.
As part of the consideration, shareholders will receive USD 16.10 in cash per scrips, representing a 39.0 per cent premium to the closing share price of 12th February 2018, the last unaffected trading day prior to initial speculation.
Upon completion, Bojangles will continue as an independent, privately-held company from its North Carolina headquarters.
Established in 1977, the fried chicken chain runs over 766 facilities across North America, including Alabama, Florida, Georgia, Kentucky, Maryland, North Carolina, and Virginia, among others.
The transaction is expected to complete in the first quarter of 2019.
A deal may come at a crucial time for Bojangles; the chain is suffering from a decline in sales, which Reuters notes comes amid a competitive restaurant industry that has caused companies to struggle due to a rise in costs.
Second quarter results for the fried chicken company ending 1st July 2018, show a 2.7 per cent increase in revenue from USD 136.80 million in Q2 2017 to USD 140.50 million, but comparable restaurant sales dropped by 0.2 per cent.
The acquisition follows a recent spate of deals in the US restaurant sector in the last few months, with companies such as Inspire Brands snatching up Sonic Corp, the owner of Arby and Buffalo Wild Wings, for USD 2.30 billion.
Other high profile chains that have put itself up for grabs include pizza business Papa John’s International, which has been looking for investment following reports of falling sales and controversy surrounding its founder John Schnatter.
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