Ignite Restaurant Group Acquires Romano’s Macaroni Grill For $55.0 Million

Romano’s Macaroni Grill, which opened its first restaurant in 1988, currently owns and operates 186 units and franchises five units across 36 states. Additionally, the brand franchises an additional 19 units throughout nine U.S. territories and foreign countries. For the twelve month period ending December 31, 2012, Romano’s Macaroni Grill generated approximately $385 million in revenues. Average unit volumes are approximately $2.1 million.

Blending 20 years of tradition with innovative Italian cooking, Macaroni Grill provides a rich dining experience matched with an authentic Italian menu. From bronze-cut Italian pastas with seasonal ingredients to grilled steak, seafood, hand stretched pizzas and flatbreads, and decadent desserts; a visit to Macaroni Grill is truly an affordable indulgence. The high quality authentic Italian ingredients, honor system house wine and opera singers showcase the restaurant's heritage, while the open kitchen, brick ovens and festive atmosphere bring energy to every meal. In addition to their restaurants, the brand also features a line of packaged food products based on dishes offered by the restaurant.

Ray Blanchette, President and Chief Executive Officer of Ignite Restaurant Group, stated, “As a pioneer in the polished casual segment and with a similar operating format to our existing brands, Macaroni Grill is an ideal complement to the Ignite family of brands. We intend to leverage the unique atmosphere and enhance the high quality menu that has been a hallmark of Macaroni Grill since its inception. We believe that our operations, brand management and real estate portfolio strengths provide tangible opportunities to elevate the brand experience and drive shareholder value. We have a history of driving operating improvements at Joe’s Crab Shack and we believe we have identified significant opportunities and synergies that we will leverage over the next twelve months and beyond. We are excited that this acquisition will transform Ignite into a company with three high quality casual dining brands, almost one billion in revenues, and significant earnings growth potential over time.”

Josh Olshansky, Managing Director of Golden Gate Capital, added, “We are pleased with the outcome of our successful investment in Macaroni Grill and believe the Company is well positioned for the future. Ignite is a great strategic partner to help take Macaroni Grill to its next phase of growth.”

2013 Combined Store Count and Revenue Projections

Unit Count

Planned 2013 net growth considers as many as 11 net new locations. As previously announced the Company will open 14 new Joe’s Crab Shack and/or Brick House units and convert as many as two units. Additionally, as many as three Romano’s Macaroni Grill units may be closed or converted to Joe’s or Brick House units during fiscal 2013.

Fiscal 2013 Projected Revenues (amounts in millions)

(1) Pro Forma 2013 Revenues assumes the acquisition occurred on January 1, 2013 and reflects an additional $200 million to $210 million of Romano’s Macaroni Grill revenue over our forecasted IRG 2013 revenue

The Company’s forecasted revenues are based in part on the following assumptions:

• As many as 16 new Joe’s Crab Shack and/or Brick House restaurants, including two potential conversions,
• An approximate 1% comparable sales increase, and
• The transaction closing late in the second quarter of 2013 and including approximately 7 additional months of revenue over and above the revenue assumed for forecasted IRG 2013. Actual revenue may differ materially from forecasted and pro forma revenue.

Acquisition-Related Costs

The Company expects to incur approximately $8 million in acquisition related costs, of which approximately $7 million will be expensed at the close or within the first six months post-close. These costs include legal, accounting and bank fees, as well as, specific integration costs such as relocation and severance.

KeyBanc Capital Markets is serving as exclusive financial advisor to Ignite Restaurant Group. Additionally, KeyBank National Association and Bank of America Merrill Lynch are Joint Lead Arrangers and Joint Bookrunners on the transaction financing.

Reader Comments:

Be the first to leave a comment for this article

Tweet #RestaurantNews Tweet #RestaurantDevelopment Tweet #Romano’sMacaroniGrill Tweet