California Pizza Kitchen (CPKI) reached an agreement on Wednesday to be taken private by Golden Gate Capital in a deal that carries an 11% premium on the restaurant chain.
Los Angeles-based California Pizza said it has agreed to be acquired for $18.30 a share in cash from Golden Gate, which has invested in over 20 retail brands over the past five years, including the Macaroni Grill and On The Border.
The leveraged buyout carries an 11% premium on California Pizza’s closing price on Wednesday of $16.69 but a 32% premium to its 30-day average price prior to announcing plans to search for strategic alternatives in February 2010.
“We are very excited as we open a new chapter in the very successful history of CPK,” California Pizza co-CEO and co-Chairmen Rick Rosenfield and Larry Flax said in a statement. “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.”
Under the terms of the agreement, Golden Gate will commence a tender off for all outstanding shares of California Pizza no later than June 8. The companies expect the deal to close during the third quarter.
Founded in 1985, California Pizza has 265 restaurants across the country and posted first-quarter revenue of $155.96 million earlier this month amid a 2.1% drop in same-store sales.
“We have great respect for the California Pizza Kitchen brand,” said Josh Olshansky, a managing director at 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.”
Shares of California Pizza leaped 10.11% to $18.40 ahead of Wednesday’s open.