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HOUSTON-Landry’s Restaurants Inc. has entered into a definitive agreement with JCS Holdings LLC, a subsidiary of J.H. Whitney Capital Partners LLC, to sell 120 of its Joe’s Crab Shack restaurants. The transaction value is $192 million and includes real estate and assumption of working capital liabilities.

The transaction is scheduled to close before the year ends. Landry’s Restaurant is being represented by North Point Advisors LLC of Oakland, CA. The remaining 23 Joe’s Crab Shacks will be closed or converted to another Landry’s concept and operated under a licensing agreement with the New Canaan, CT-based JCS Holdings.

In a statement about the agreement, Landry’s chairman, president and CEO Tilman Fertitta said that a company focus on its higher-end assets has prompted the sale. “We are now going in a different strategic direction, focused more on our higher-end restaurants, hospitality and gaming assets,” he said. “Joe’s just does not fit well in our future plans.”

Additionally, the balance sheet tells the story. Although same-store sales for the company in Q3 increased overall by 1.0%, the Joe’s Crab Shack division had a negative 8% in same-store sales. Rick Liem, the company’s senior vice president and CFO, said Landry’s Q3 loss–due to the Joe’s Crab Shack division–is estimated to range from $1.65 to $1.85 per share, diluted.

No reasons for the division’s poor performance have been made public. But in July, Liem said increasing gasoline prices and energy costs make “the operating environment more difficult in this segment of the casual dining sector.” Representatives from Landry’s could not be reached by press time.

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