Its fourth quarter saw a 3.7 percent decline in sales.
Video provided by Newsy
Ruby Tuesday, based in Maryville, has agreed to sell out to an Atlanta private equity firm.
The restaurant chain has struggled for some time, announcing in August that its revenue declined nearly 13 percent during the previous fiscal year. That included the effects of closing 103 restaurants. In March, the company agreed to consider sale or merger.
Equity firm NRD Capital will buy all Ruby Tuesday common stock for $2.40 per share in cash, and will take on debt obligations, making the total deal worth $335 million, less transaction expense, according to a news release.
That price is 21 percent above Ruby Tuesday’s closing share price on Oct. 13.
“The board of directors and our advisors have thoroughly evaluated all options available to the company and are confident that this agreement will provide the most promising opportunity to realize the highest value for our stockholders while providing the best path forward for the Ruby Tuesday brand, its employees, franchisees, and loyal customers,” Stephen Sadove, Ruby Tuesday’s non-executive chairman said in the announcement.
Ruby Tuesday’s board and NRD approved the deal unanimously, but it still faces shareholder approval and other closing conditions. Until the sale closes, Ruby Tuesday is not offering further comment. The acquisition is expected to be complete in the first quarter of 2018.
Aziz Hashim founded NRD in 2014; the firm specializes in businesses with franchise operations.
“Our focus at NRD is investing in quality restaurant companies and providing strategic and operational expertise to create sustainable value. With a well-established brand, differentiated from other casual dining restaurants by its Garden Bar, we see significant opportunities to drive value for Ruby Tuesday,” Hashim said in the news release. “We are excited to be part of the company’s next chapter. As a private company, we will be able to take a long-term view on Ruby Tuesday, allowing us to make an investment in people, product, and customer experience, without public company constraints.”
As of Sept. 5 there were 599 Ruby Tuesdays, a half-dozen fewer than three months earlier. Of those restaurants, 541 are company-owned and 58 are franchises, according to the news release.
Locally, the chain has two restaurants in Alcoa, and one each in Athens, Harriman, Jefferson City, Knoxville, Lenoir City, Morristown, Newport, Powell and Sevierville.
Read or Share this story: http://knoxne.ws/2ypHwQp