On Monday, restaurant chain Ruby Tuesday (NYSE:RT) announced that it will be acquired by private-equity firm NRD Capital for $2.40 per share in cash, representing a total enterprise value of about $335 million. In mid-morning trading, shares of Ruby Tuesday are jumping, up over 19% to $2.37 a share.
NRD Capital will assume or retire all of its debt obligations as well. The purchase price reflects a 21% premium of Ruby Tuesday’s closing share price last Friday, October 13.
"NRD Capital has a distinguished track record of achieving and maintaining profitable growth for restaurant concepts and will be an excellent partner to lead Ruby Tuesday going forward,” Stephen Sadove, non-executive chairman of Ruby Tuesday, said in a press release.
The deal is expected to close sometime between next January and March, and is subject to shareholder approval. NRD also hopes to utilize its past experience working with fellow restaurant companies like Popeye’s PLKI and Domino’s Pizza (NYSE:DPZ) , as well as continue to develop its restaurant portfolio that includes Frisch’s and Fuzzy’s Taco Shop.
Aziz Hashim, founder of NRD, said that “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.”
Ruby Tuesday also reported first-quarter financial results today, posting a loss of a penny per diluted share and revenues of $217.3 million. Revenues were down over 15% year-over-year, while same-restaurant sales declined 5.8% compared to a 2.7% decrease in the prior-year period.
The restaurant, known for its salad bar, has struggled with losses and declining sales for the past few years now, as customers would rather eat at competitors like Chili’s, owned by Brinker International (NYSE:EAT) or Applebee’s, owned by DineEquity (NYSE:DIN) .
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