Denny’s Corp. has been sold to TriArtisan Capital Advisors, Treville Capital Group and Yadav Enterprises for $620 million in an all-cash transaction.
The price equates to $6.25 per share, a 52% premium compared to Denny’s closing share price Monday. It will take the company private.
Spartanburg, S.C.-based Denny’s consists of the 1,484-unit namesake diner chain as well as the 74-unit Keke’s Breakfast Cafe. It has been publicly traded since 1997, and there had been no indications that it was for sale.
“We are pleased to enter this transaction, which delivers significant, near-term and certain cash value to our stockholders,” said Kelli Valade, Denny’s CEO, in a statement. “After receiving indications of interest from TriArtisan, the Board conducted a thorough review of strategic alternatives to maximize value with the assistance of external advisors. As part of the review, the Company reached out to more than 40 potential buyers and ultimately received multiple offers. The Board evaluated any potential transaction against Denny’s standalone plan and all external strategic alternatives. After careful consideration of all options and in consultation with external financial and legal advisors, the Board is confident the transaction maximizes value and has determined it is fair to and in the best interests of stockholders and represents the best path forward for the Company.”
TriArtisan and Yadav bring significant restaurant experience to the deal. Treville is an alternative asset manager. TriArtisan is a private-equity firm that owns P.F. Chang’s and had large stakes in TGI Fridays and Hooters, both of which filed for bankruptcy over the past year, while Yadav is an operator of Denny’s, Jack in the Box and TGI Fridays restaurants and also owns Taco Cabana and Nick the Greek. Yadav also bought Del Taco last month.
“Denny’s is an iconic piece of the American dream, with a renowned brand, a strong franchise base and loyal customers,” said Rohit Manocha, Co-Founder and Managing Director at TriArtisan, in a statement. “Our team has significant investment experience in the restaurant industry and our acquisition of Denny’s builds on our success with other full-service restaurant concepts. We look forward to working with Kelli and the rest of the Denny’s team and franchisees to provide resources and support the Company’s long-term strategic growth plans.”
Denny’s has been in the midst of a turnaround effort that has involved plans to close 90 restaurants this year. Sales and traffic have struggled, and the chain has leaned heavily into value offers to spark traffic. Denny's stock had been slumping all year and before the sale announcement Monday closed at $4.11 per share, down 32% year to date.
The chain was scheduled to report its third quarter earnings results Monday afternoon, but cancelled a call with analysts in light of the sale.
Results had not yet been posted as of publication time.
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