Buffalo Wild Wings, Inc. (Nasdaq:BWLD), today announced the exercise of a right of first refusal to acquire the assets of nine Buffalo Wild Wings franchised restaurants in the Las Vegas, Nevada area, which includes one unit that is currently under construction. The Company also announced a two-for-one stock split in the form of a 100% stock dividend to its shareholders.
Franchised Restaurant Acquisition
The Company expects the acquisition, if completed, to close in the fourth quarter of 2007 and, with the exception of one-time transaction costs, to be accretive to earnings. These restaurants are currently operated by Bill Welter, whom the Company intends to retain as a consultant after closing. Average weekly sales for the eight existing restaurants over the last twelve months, which includes food, beverage, and gaming revenues, exceeded $55,000. The Company anticipates funding the purchase price of approximately $26 million with available cash and marketable securities.
Sally Smith, President and Chief Executive Officer, commented, 'Las Vegas is an excellent market for Buffalo Wild Wings and we see opportunity for further growth and development. Bill and his team have done an incredible job of winning loyal guests by building a strong connection with the communities in which the restaurants are located. With Bill's help, we hope to continue this great tradition.'
Mr. Welter remarked, 'Buffalo Wild Wings has built a distinct brand that is taking root nationally, and my family and I have enjoyed contributing to this success by establishing the brand in the Las Vegas market. It has been gratifying to lead this effort over the past seven years. I look forward to working with this great team to capitalize on remaining opportunities within the market and am pleased that our Las Vegas team members will benefit from being a part of an organization with a strong national brand and great resources.'
The acquisition is subject to purchase price adjustments and a holdback that would protect the Company if opening of the unfinished unit is delayed. The transaction also remains dependent on execution of a definitive asset purchase agreement, receipt of necessary approvals for gaming and liquor licenses (which are expected to take several months), lease assignments, and other customary closing conditions.
Two-for-One Stock Split
The Company also announced that its Board of Directors declared a two-for-one stock split of its outstanding shares of Common Stock. The stock split will be effected in the form of a 100% stock dividend to shareholders of record as of the close of business on June 1, 2007. The Company expects that its transfer agent will issue the additional shares on or about June 15, 2007. Each shareholder will receive one additional share of Buffalo Wild Wings Common Stock for every one share owned. The Company had 8,775,849 shares of Common Stock outstanding as of May 15, 2007.
The Company's stock has more than tripled since the time of its initial public offering when it closed at $22.95 on the first day of public trading on November 21, 2003. Yesterday, the closing price of Buffalo Wild Wings' stock was $79.17.
Ms. Smith added, 'We are pleased to announce this stock split, because we believe it will place the market price of our stock in a more attractive range to investors and increase the liquidity of our shares.'
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