Red Robin Gourmet Burgers, Inc. (Nasdaq: RRGB) today announced that it has agreed to acquire the assets of 4 Red Robin franchised restaurants for a total of $8.1 million.
In addition to these four existing restaurant locations, the Company also expects to acquire the development rights to the territories formerly subject to exclusivity provisions in their respective franchise agreements.
Three of these franchised restaurants are located in northern Indiana, and one franchised restaurant is located in South Plainfield, New Jersey. The total cash purchase price is expected to be approximately $5.8 million for the Indiana locations, and approximately $2.3 million for the New Jersey restaurant. These transactions are subject to purchase price adjustments, and less any assumed indebtedness.
The combined revenue from these four restaurants was $10.7 million in 2007. The Company currently expects the acquisitions, if completed, to close in the second quarter of 2008. The Company anticipates funding the purchase through borrowings under its credit facility. The closing of the acquisitions is subject to completion of due diligence satisfactory to the Company, necessary licensing approvals, lease consents and transfers, and negotiating a definitive acquisition agreement, among other customary closing conditions.
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