O'Charley's Acquires Ninety Nine Restaurant Chain in $160M Deal

Under terms of the agreement, O'Charley's will acquire Ninety Nine for $120 million in cash and approximately 2.35 million shares of O'Charley's common stock. The cash portion of the purchase price will be funded with additional debt facilities. O'Charley's has received a commitment for this financing from Wachovia Bank, N.A.

Gregory L. Burns, chairman and CEO of O'Charley's, says that the acquisition of Ninety Nine accelerates his company's entry into New England by several years. He notes that the deal was attractive because of Ninety Nine's "experienced management team that will remain intact, exceptionally low management and hourly turnover, a proven, dominant concept that was the first of its kind in New England, growth opportunities for the next five years in its existing and new markets, and an operating philosophy remarkably similar to O'Charley's."

He adds that the "multi-concept companies" are the future of the restaurant industry, pointing out that O'Charley's had previously indicated its willingness to look at the right opportunity if it became available. Ninety Nine fits in with O'Charley's overall strategic plan, he says, as its store models require low initial investments and average annual unit sales of approximately $2.7 million. Burns says that the company plans to continue to operate O'Charley's, Ninety Nine and Stoney River as stand-alone concepts within O'Charley's Inc. while providing "strategic oversight and support."

O'Charley's operates 180 restaurants in 14 states in the Southeast and Midwest as well as five Stoney River Legendary Steaks restaurants with two locations in Atlanta, Georgia, two locations in Chicago, Illinois, and one location in Louisville, Kentucky. Ninety Nine generated revenues of $190 million last year.