DALLAS & NEW YORK–(BUSINESS WIRE)–Fiesta Restaurant Group, Inc. (NASDAQ: FRGI), parent company of the Pollo Tropical restaurant brand, and Authentic Restaurant Brands, a portfolio company of Garnett Station Partners, LLC, a New York-based principal investment firm, today announced that they have entered into a definitive agreement under which a wholly owned subsidiary of ARB will acquire the Company in an all cash transaction.
ARB is a holding company with a portfolio of powerhouse, iconic regional food and beverage brands, with extraordinary customer brand loyalty and rich, authentic stories. Current brands include Primanti Bros Restaurant & Bar, P.J. Whelihan’s Pub & Restaurant and Mambo Seafood. ARB is led by industry veterans including Chairman Alex Macedo and CEO Felipe Athayde. Upon closing the transaction, Fiesta will operate as a privately held company and Pollo Tropical will remain based in Miami, FL. Fiesta’s leadership team will continue to operate Pollo Tropical as an independent brand within the ARB platform.
Under the terms of the definitive merger agreement, which has been unanimously approved by Fiesta’s Board of Directors, Fiesta common stockholders will receive cash consideration of $8.50 per share.
“Our Board formed a Special Committee comprising independent directors that worked with outside advisors and conducted a comprehensive review of a wide range of strategic alternatives to maximize shareholder value,” said Stacey Rauch, Fiesta’s Chair of the Board of Directors. “The Special Committee and, ultimately, the full Fiesta Board of Directors, determined that this transaction delivers significant, immediate and certain value to Fiesta stockholders while providing Pollo Tropical the scale, resources and flexibility for continued success as part of a private company.”
Dirk Montgomery, Fiesta Restaurant Group President and Chief Executive Officer, said, “The transaction validates the actions we have taken to position Pollo Tropical in our markets, enhance the guest experience and improve performance across our footprint. With this transaction, Fiesta will be better positioned financially and operationally to advance our mission of providing great food and hospitality to our guests. Garnett Station has a proven track record of successfully identifying and partnering with iconic, regionally focused brands to help accelerate their growth. We look forward to working closely with Alex, Felipe and the rest of the Garnett Station and ARB teams and to benefiting from their extensive restaurant, digital and analytical expertise as we focus on supporting the success of our brand, franchisees and people.”
“We have been fans of Fiesta and their Pollo Tropical restaurants for some time,” said Alex Macedo, Chairman of Authentic Restaurant Brands. “Pollo Tropical restaurants are a mainstay on the dining scene throughout Florida, and we are confident that ARB is a perfect partner to harness the power of the brand for the future.”
“Fiesta and Pollo Tropical restaurants are a natural fit into ARB’s existing portfolio,” said Matt Perelman, Managing Partner and Co-Founder of Garnett Station Partners. “Pollo Tropical restaurants have a storied heritage and a deep-rooted connection with their local communities that perfectly align with ARB’s ethos and value proposition. ARB looks forward to working with Dirk and Fiesta’s leadership.”
Transaction Details
The transaction is expected to be completed in the fourth quarter of 2023 and is subject to approval by Fiesta’s stockholders, expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as other customary closing conditions. The definitive merger agreement also includes a 30-day “go shop” period that will allow the Company to affirmatively solicit alternative proposals from interested parties.
The transaction is not subject to a financing contingency and affiliates of Jefferies Financial Group Inc. and AREX Capital Management, LP and its affiliated investors, who together own or control approximately 30% of the Company’s outstanding shares, have each entered into a voting agreement pursuant to which they have agreed, among other things, to vote their respective shares of common stock of Fiesta in favor of the transaction.
Advisors
Jefferies LLC is acting as lead financial advisor and Gibson, Dunn & Crutcher LLP is serving as legal counsel to Fiesta in connection with the proposed transaction. Houlihan Lokey Capital, Inc. is acting as financial advisor to the Special Committee of the Fiesta Board of Directors. Guggenheim Securities is serving as lead financial advisor and Kirkland & Ellis LLP is acting as legal counsel to ARB and Garnett Station. William Blair & Company, LLC also is serving as a financial advisor to the Board of Directors of ARB.
About Fiesta Restaurant Group, Inc.
Fiesta Restaurant Group, Inc., owns, operates and franchises for the Pollo Tropical restaurant brand. The brand specializes in the operation of fast casual/quick service restaurants that offer distinct and unique flavors with broad appeal at a compelling value. The brands feature fresh-made cooking, drive-thru service, and catering. For more information about Fiesta Restaurant Group, Inc., visit www.frgi.com.
About Authentic Restaurant Brands
Authentic Restaurant Brands is a holding company of powerhouse, regional food and beverage brands with extraordinary customer brand loyalty and rich, authentic stories. Established in 2021, ARB is a Garnett Station portfolio company currently comprised of three market-leading, iconic brands each with over 25-year operating histories including Primanti Bros Restaurant & Bar based in Pennsylvania, West Virginia, Ohio, and Maryland, P.J. Whelihan’s Pub & Restaurant based in the Greater Delaware Valley including Philadelphia and South Jersey and Mambo Seafood based in Houston, Texas.
ARB is strongly committed to growing each of our brands by leveraging their respective foundations, while sharing best practices across our portfolio under our common ownership. For more information, please visit www.authenticrb.com.
About Garnett Station Partners
Garnett Station Partners is a principal investment firm founded in 2013 by Matt Perelman and Alex Sloane that manages over $2 billion of assets. Garnett Station partners with experienced and entrepreneurial management teams and strategic investors to build value for its portfolio of growth platforms. The firm draws on its global relationships, operational experience and rigorous diligence process to source, underwrite and manage investments. Core sectors include consumer and business services, health & wellness, automotive, and food & beverage. Garnett Station’s culture is based on the principles of entrepreneurship, collaboration, analytical rigor and accountability. For more information, please visit www.garnettstation.com.
