Denny's to Go Private in $620 Million Deal
Last fall, Denny's announced plans to close 150 of its lowest-performing locations. By the end of the second quarter, the chain operated 1,558 restaurants globally.
Acquisition and Deal Details
Denny's revealed on Monday that it will be acquired by a group of investors, taking the breakfast chain private. The board unanimously approved the agreement, which values the company at $620 million including debt.
- The buyers include private equity firm TriArtisan Capital Advisors, investment firm Treville Capital, and Yadav Enterprises, one of Denny’s largest franchisees.
- Shareholders will receive $6.25 in cash per share, totaling $322 million.
- This price represents a 52% premium over Monday’s closing stock price.
- Denny's shares surged 47% during after-hours trading following the announcement.
Company Background
Denny's was founded in 1953 in Lakewood, California, originally called Danny’s Donuts. The name changed to Denny’s Coffee Shops in 1959 to avoid confusion with another chain. The company went public on the New York Stock Exchange in 1969.
Challenges Faced
Like many casual dining chains, Denny’s suffered sharp sales declines during the COVID-19 pandemic. As conditions improved, the company faced shifting consumer habits, such as increased demand for delivery options. Additionally, it has struggled against competitors like First Watch, which offer healthier breakfast choices.
"Last fall, Denny’s said it planned to close 150 of its lowest-performing locations."
Author's summary: Denny’s, facing pandemic-related challenges and evolving market trends, is set to go private in a $620 million buyout, marking a significant shift for the breakfast chain.