Denny's to Go Private in $620 Million Deal
Last fall, Denny's announced plans to close 150 underperforming locations. By the end of Q2, the chain operated 1,558 restaurants worldwide.
Acquisition Details
Denny's revealed Monday that it will be acquired by a group of investors, transitioning the company into private ownership. The board unanimously approved the deal, valuing Denny's at $620 million, including its debt.
The buyers include private equity firm TriArtisan Capital Advisors, investment company Treville Capital, and Yadav Enterprises, one of Denny’s largest franchisees.
Shareholder Impact
Under the agreement, shareholders will receive $6.25 in cash per common share, totaling $322 million. This offer carries a 52% premium over Denny's closing price on Monday. Following the announcement, shares surged 47% in after-hours trading.
Company History and Challenges
Denny’s originated in 1953 as Danny’s Donuts in Lakewood, California. In 1959, it was renamed Denny’s Coffee Shops to avoid confusion with another chain. The company went public on the New York Stock Exchange in 1969.
"Like many casual chains, Denny’s saw its sales plummet during the COVID pandemic."
Post-pandemic, Denny's has faced evolving customer habits, including a shift toward delivery. Competition has increased from newer chains like First Watch, which offer healthier breakfast choices.
Summary
Denny’s is undergoing significant restructuring, including closures and ownership changes, as it adapts to market shifts and tougher competition.
"Last fall, Denny’s said it planned to close 150 of its lowest-performing locations."
Author's summary: Denny’s agreed to a $620 million privatization deal after struggling with pandemic impacts and changing market demands, aiming to reposition itself in the evolving breakfast restaurant landscape.
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