Magic Brands, LLC Announces Agreement for Asset Sale with Tavistock Group
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* Fuddruckers and Koo Koo Roo Restaurants Included in $40-Million Transaction * Voluntary Chapter 11 Filing to Facilitate Sale * Normal Operations at More Than 200 Restaurants to Continue without Interruption * Secures $14 Million in DIP Financing AUSTIN, Texas--(Business Wire)-- Magic Brands, LLC, parent of the Fuddruckers and Koo Koo Roo restaurant brands, announced today that it has signed an Asset Purchase Agreement with Tavistock Group to sell substantially all of its assets in a $40-million going concern transaction. As required under the purchase agreement and to facilitate the sale, Magic Brands, LLC and certain of its affiliates have voluntarily filed petitions under Chapter 11 of the U.S. Bankruptcy Code. None of the 135 franchisee-owned Fuddruckers restaurants are included in the filing. The Tavistock purchase is subject to court approval and Magic Brands will file a motion to establish bidding procedures to allow other qualified bidders to submit higher and better offers to purchase the assets. Magic expects the sale process to be completed within 60 to 90 days. "During the course of the transaction, Fuddruckers and Koo Koo Roo guests will see no difference in the quality dining experience they have come to expect in our restaurants," said CEO Peter Large. "Our daily operations will continue as usual in more than 200 restaurants across the country. Employees will be paid without interruption. "This transaction with Tavistock Group allows Fuddruckers to restructure our finances to provide the highest degree of flexibility to fund our remodel and expansion program," Mr. Large said. "As demonstrated by the level of interest from potential bidders over the past several weeks, Fuddruckers is a strong brand with a national reputation for quality gourmet burgers in a family-friendly environment." As part of Fuddruckers plan to concentrate resources in operations with the strongest potential for growth, the company will use the Chapter 11 process to terminate certain leases and will close 24 corporate-owned Fuddruckers restaurants by April 30, 2010. "We regret that some team members have lost their positions as a result of the restaurant closures, but these difficult actions are essential to the long-term strength of Fuddruckers," said Mr. Large. "By shedding burdensome leases under the protection of Chapter 11, Fuddruckers will regain the financial stability and flexibility it needs to pursue strategic growth initiatives that will benefit our brand, our franchisees and, most importantly, our guests." More than 200 Fuddruckers restaurant locations remain open and their daily operations will continue as usual. Gift cards purchased at closed restaurants will be honored at all Fuddruckers and Koo Koo Roo locations. Wells Fargo Capital Finance, Inc., the company`s existing senior lender, has committed to provide debtor-in-possession financing in the amount of $14 million to facilitate the sale and restructuring. FocalPoint Securities, LLC serves as investment banker to Magic Brands and Goulston & Storrs serves as lead bankruptcy counsel. For further information regarding the sale transaction and restructuring process, please contact the Company`s information line at 877-340-2764 or visit www.fuddruckersrestructures.com. About Fuddruckers Based in Austin, Texas, Magic Brands, LLC, currently operates more than 85 Fuddruckers locations in 11 states and 13 Koo Koo Roo restaurants in California. An additional 135 Fuddruckers restaurants are operated by franchisees who are small business owners and multi-unit operators. Since its founding in 1980, Fuddruckers has delivered uncompromised quality and freshness with its own brand of always fresh, never frozen, 100% All-American, premium-cut, vegetarian-fed beef. Fuddruckers 1/3, 1/2, 2/3 and one-pound Fudds Prime burgers are grilled to order and placed on a Fuddruckers scratch-baked bun made fresh daily in Fuddruckers restaurant bakeries - ready for guests to pile it high at Fuddruckers Market Fresh Produce bar for a Build Your Own Burger experience like none other. About Tavistock Group Tavistock Group is an international private investment company founded by Joe Lewis. The company provides creative capital structured for each investment opportunity and looks to deploy between $25 million to $1 billion behind established businesses which benefit from its capital, flexibility, management expertise and global network of resources. Tavistock Group invests for the long-term and focuses on improving all aspects of its investments, striving to generate strong returns and achieve excellence in every industry in which it competes. Through Tavistock Restaurants, Tavistock Group holds a diverse collection of restaurant brands, with concepts ranging from fast casual to fine dining. Tavistock Restaurants owns and operates Austin-based FREEB!RDS World Burrito, with 32 locations open and an additional 20 expected to open in 2010. Other Tavistock Restaurants brands include ZED451, Cafe del Rey, Napa Valley Grille, Blackhawk Grille, California Cafe and Sapporo. For more information on Tavistock Group, visit www.tavistock.com. For more information on Tavistock Restaurants, please visit www.tavistockrestaurants.com. Anita-Marie Laurie Aaron Curtiss (512) 275-0674 (310) 788-2850 Copyright Business Wire 2010