Hotels & Restaurants  

P.F. Chang's Acquired by Centerbridge Partners

A new merger between P.F. Chang's China Bistro and Centerbridge will turn the restaurant chain into a private entity
 P.F. Chang’s Acquired by Centerbridge Partners
 
 

Today P.F. Chang’s China Bistro announced that it’s going off the market. To be exact, it has entered into an acquisition agreement with Centerbridge Partners L.P., a move that will cost the investment firm $1.1 billion and turn the newly acquired P.F. Chang’s into a private business.

According to a press release from the Scottsdale, AZ-based restaurant chain, Centerbridge will acquire all outstanding shares of P.F. Chang's common stock for $51.50 per share in accordance with the agreement brokered between the firm and the restaurant chain.

 

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Reports from sources like the Washington Post speculate that P.F. Chang’s struggling business and declining sales may have much to do with the acquisition:

 

P.F. Chang’s said Tuesday that its net income fell 41 percent in the first quarter, as revenue at restaurants open at least a year declined. For the three months ended April 1, the figure slipped 0.6 percent at the company’s namesake restaurants and 1.7 percent at Pei Wei restaurants.

[…]

Net income for the latest quarter was $6.3 million, or 30 cents per share, down from $10.6 million, or 46 cents per share, in the same quarter last year. Excluding one-time gains and losses, net income was 35 cents per share for the recent quarter. Revenue edged up slightly to $318.9 million from $317.4 million.

 

Analysts are speculating that this is a more extreme effort to jump start the company’s momentum, in line with its efforts to cut price points and reduce portion sizes at its namesake chain as well as its more budget-friendly Pei Wei Asian Diners outposts. Still, P.F.Chang’s CEO and Chairman Rick Federico seems to remains optimistic that this Centerbridge acquisition will point the chain in the right direction and allow for more flexibility for positive development.

“We are excited about this transaction with Centerbridge, as it recognizes the value of P.F. Chang's highly respected brands and talented employees, while providing our stockholders with an immediate and substantial cash premium for their investment,” said Federico in the press release. “We look forward to working with Centerbridge to further strengthen the Company and our growing P.F. Chang's, Pei Wei, True Food Kitchen and Global Brands businesses. We are confident that being a private company will provide us with greater flexibility to focus on our long-term strategic plan of elevating our guest experience, enhancing our value proposition, growing traffic and improving the performance of our brands.”

As part of the transaction, Centerbridge should commence with a tender offer for all of P.F. Chang’s outstanding shares by May 15 at the latest. The transaction as a whole is expected to close by the end of 2012’s third quarter. 



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