Development

Diversified Restaurant Holdings, Inc. To Be Acquired By ICV Partners

Stockholders to receive $1.05 per share in cash, representing a 111% premium to the 30-day volume weighted average price

Diversified Restaurant Holdings

Diversified Restaurant Holdings, Inc. (Nasdaq: SAUC), one of the largest franchisees for Buffalo Wild Wings with 64 sports bars across five states, today announced the execution of a definitive merger agreement with investment entities affiliated with ICV Partners, LLC, a leading private investment firm that supports strong lower middle market companies.

Under the terms of the agreement, ICV has agreed to acquire the Company in an all cash transaction valued at approximately $130 million, including the assumption of outstanding indebtedness and transaction expenses. DRH’s common stockholders will receive $1.05 per share in cash, representing an approximate 123% premium to the Company’s closing share price on November 5, 2019, and an approximately 111% premium to the 30-day volume weighted average stock price.

“This transaction validates the strength of our franchise, creates a strong future for our employees, and provides a significant platform from which ICV can continue to build, while also rewarding our stockholders for their commitment,” commented Michael Ansley, Founder of DRH, Executive Chairman and Acting CEO. He added, “These are exciting times for the Buffalo Wild Wings brand. Inspire Brands has reignited the sports bars with an improved menu, better customer experience and strong support for its franchisees. With the strength of ICV, our franchise can better leverage this effort and further the long history of BWW customer loyalty.”

The transaction is structured as a merger of the Company with a newly-formed entity affiliated with ICV, with DRH continuing as the surviving entity of such merger. Upon closing, stockholders of DRH will receive $1.05 per share in cash.

The Company’s merger agreement with ICV was unanimously approved by the Company’s Board of Directors following a previously announced review of strategic alternatives undertaken by the Company. The closing of the transaction is subject to stockholder approval, the consent of BWW, and other customary closing conditions. The Company and ICV expect to complete the transaction by the end of 2019 or early 2020, following the annual meeting of stockholders at which the transaction will be an item presented for stockholder approval.

Michael Ansley and Jason Curtis, collectively holding approximately 34% of the outstanding shares of the Company, have entered into voting agreements committing them to, among other things and subject to its terms, vote in favor of adopting the merger agreement.

Duff & Phelps acted as exclusive financial advisor to the Company and provided a fairness opinion to the Company’s Board of Directors in connection with the transaction, and Dykema served as legal counsel to the Company. DLA Piper served as legal counsel for ICV in connection with the transaction.



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