More than a year after putting itself up for sale, California Pizza Kitchen Inc. and Golden Gate Capital today have announced that they have entered into a definitive agreement for $470 million, or $18.50 per share.
This price was lower than expectations and its $20 52-week high set in May 2010. However, it was about $2 higher than its current share price and represents a 32 percent premium to the 30-day average price prior to the company's search for a buyer began.
The transaction is currently expected to close in the third quarter of this year.
The announcement follows a comprehensive review undertaken by the board to maximize stockholder value. The company formed a special committee, comprised of independent directors, and hired financial advisors to evaluate strategic and financial alternatives. After the assessment, the committee recommended a unanimous approval of the agreement, which the board agreed to.
"This announcement represents a very positive outcome for our stockholders and we believe it is also a great development for our employees, guests and business partners. We are very excited as we open a new chapter in the very successful history of CPK," said Rick Rosenfield and Larry Flax, co-CEOs, co-chairmen of the board and co-founders of CPK. "Golden Gate Capital is a leading investor in the restaurant industry, with a proven track record as a value-added partner to its portfolio companies, and we believe that its significant commitment and experience in the sector will benefit all of our stakeholders."
"We have great respect for the California Pizza Kitchen brand," added Josh Olshansky, a managing director with Golden Gate Capital. "The business that the CPK team has built, with its great product offerings, makes it an ideal fit with our long-term oriented approach to investing. We are very pleased to partner with the company to continue to invest in the business for the benefit of all its guests, employees and partners."
California Pizza Kitchen Inc. was founded in 1985 and is known for its imaginative line of hearth-baked pizzas, including the original BBQ Chicken Pizza. Of the chain's 265 restaurants, 205 are company-owned and 60 operate under franchise or license agreements.
Golden Gate Capital is a San Francisco-based private investment firm with a portfolio that includes On the Border Mexican Grill, Romano's Macaroni Grill, Eddie Bauer, Express, J.Jill, and Zales.