restaurant monthly august 2015 - tm capital...

Restaurant MonthlyAugust 2015

Restaurant Industry Commentary

16.0x 14.8x12.4x 11.4x

8.7x

14.0x 14.0x11.6x 10.4x 9.2x

—

5.0x

10.0x

15.0x

20.0x

Premium Dining Casual DiningFamily DiningFast CasualQSR

Public Market Performance (Latest Twelve Months)

Indices consist of all publicly-available information for restaurant operators in their respective price points. For full listing, please contact the TM Capital Restaurant Practice.

Recent Restaurant M&A Activity

12.3x 13.8x

8.5x 8.9x 7.8x

13.3x 13.3x

8.0x 9.1x 7.4x

—

5.0x

10.0x

15.0x 12.3x 13.8x

8.5x 8.9x 7.8x

13.3x 13.3x

8.0x 9.1x 7.4x

—

5.0x

10.0x

15.0x

Current Restaurant Valuations by Price Point (TEV / EBITDA)

($ in millions)

Closed / Announced Target Acquiror

Enterprise Value EBITDA / Value Multiple

Industry Segment

08/07/2015 5 Burger King Restaurants in South Carolina Carrols Restaurant Group, Inc. (NasdaqGS:TAST) NA NA / NA QSR08/04/2015 Starr Restaurants Catering Group GP, LLC TrustHouse Services Group, Inc. NA NA / NA Premium

08/04/2015A The Sandwich Shop Holdings, 23 Jimmy John's Units Atlantic Street Capital Management, LLC NA NA / NA Fast Casual07/21/2015 King Venture, Inc., 60 Burger King Restaurants Nonami LLC; GPS Hospitality, LLC; The Cynosure Group NA NA / NA QSR

07/14/2015 Tender GreensAlliance Consumer Growth; Union Square Hospitality Group

NA NA / NA Fast Casual

07/09/2015A Katsu USA, LLC; Katsuya, LLC The ONE Group Hospitality, Inc. (NasdaqCM:STKS) NA NA / NA Premium07/07/2015 Fazoli's System Management, LLC Sentinel Capital Partners, L.L.C. NA NA / NA Fast Casual07/07/2015 TGI Friday's 48 Restaurants in Midwest JIB Management, Inc. NA NA / NA Casual06/30/2015 24 Fast Food Restaurants in South KBP Foods, LLC NA NA / NA QSR06/25/2015 Pepper Dining, Inc. Brinker International, Inc. (NYSE:EAT) $160.5 NA / NA Casual06/18/2015 Tava Indian Kitchen, LLC Agilic Capital LLC NA NA / NA Fast Casual06/15/2015 Saladworks, LLC Centre Lane Partners NA NA / NA Fast Casual06/11/2015 6 Buffalo Wild Wings Restaurants Buffalo Wild Wings Inc. (NasdaqGS:BWLD) NA NA / NA Casual06/09/2015 Naf Naf Grill, LLC Roark Capital Group NA NA / NA Fast Casual05/27/2015 18 TGI Friday's in Miami and Charlotte Jackmont Hospitality NA NA / NA Casual

05/22/2015A Frisch's Restaurants, Inc. (AMEX:FRS) NRD Capital Management $170.0 $23.60 / 7.2x QSR05/07/2015 Bad Daddy's International Good Times Restaurants ( NasdaqCM:GTIM) $21.0 NA / NA QSR05/07/2015 3 Buffalo Wild Wings Restaurants in Florida Diversified Restaurant Holdings (NasdaqCM: BAGR) NA NA / NA Casual04/23/2015 King's Country Shoppes Kelly Capital Investments NA NA / NA Family04/17/2015 Macaroni Grill RedRock Partners $8.0 NA / NA Casual04/15/2015 4 Burger King Restaurants in Vermont Carrols Restaurant Group, Inc. (NasdaqGS:TAST) NA NA / NA QSR04/15/2015 Ridge Runner Fast Foods Carolina Quality NA NA / NA QSR04/02/2015 Catalina Restaurant Group Food Management Partners NA NA / NA Casual04/01/2015 100 Jamba Juice Store Vitaligent, LLC $36.0 NA / NA QSR03/18/2015 BGR Holdings Chanticleer Holdings (NasdaqCM:HOTR) NA NA / NA Fast Casual03/10/2015 Hamburger Mary's Phoenix Investors NA NA / NA Casual

03/12/2015A Del Taco Holdings Levy Acquisition Corp. $500.0 NA / NA Casual03/12/2015A 26 Denny's Restaurants RJC, LLC NA NA / NA Family03/12/2015 23 Jamba Juice Stores Jamba, Inc. (NasdaqGM:JMBA) NA NA / NA QSR03/11/2015 KBP Boathouse, Victory Park, OFS NA NA / NA QSR03/06/2015 T-Bird Restaurant Group H.I.G. Capital NA NA / NA Casual02/13/2015 Cotton Patch Cafe Altamont Capital Partners NA NA / NA Fast Casual02/06/2015 5 Wendy's Restaurants in New Jersey The Briad Group NA NA / NA QSR

02/02/2015A 45 Domino's Restaurants in Indiana RPM Pizza NA NA / NA QSR01/21/2015 Mitchell's Fish Market Landry's Inc. $10.0 NA / NA Premium01/12/2015 The Wendy's Company, 9 Wendy's Locations Meritage Hospitality Group NA NA / NA QSR12/15/2014 Tim Hortons Inc. (TSX:THI) Burger King Worldwide, Inc. (NYSE:BKW) $12,046.0 $692.3 / 17.4x QSR11/04/2014 Einstein Noah Restaurant Group JAB Holding; BDT Capital $365.0 $35.44 / 10.3x Fast Casual10/31/2014 25 TGI Friday Restaurants in Texas and Colorado MarLu LC, Inc. NA NA / NA Casual10/16/2014 Peter Piper, Inc. CEC Entertainment NA NA / NA Family10/08/2014 30 Burger King Restaurants in North Carolina Carrols Restaurant Group, Inc. (NasdaqGS:TAST) NA NA / NA QSR09/18/2014 39 Burger King Restaurants in Ohio GPS Hospitality NA NA / NA QSR09/15/2014 S.B. Restaurant Company (Elephant Bar) CM7 Capital Partners, LLC NA NA / NA Casual08/25/2014 Rusty Taco Buffalo Wild Wings Inc. (NasdaqGS:BWLD) NA NA / NA Fast Casual08/21/2014 HDOS Enterprises Global Franchise Group NA NA / NA QSR07/28/2014 Red Lobster, Inc. Golden Gate Capital $2,113.0 $229.67 / 9.2x Casual

Industry same store sales continued to inch upwards, posting 1.6% growth in July, as foot traffic once again decreased modestly by 1.2%. In the public markets, the QSR and Fast Casual sectors lead the way—trading at respective multiples of 16.0x and 14.8x EV / TTM EBITDA—despite the Fast Casual index’s 10% decline over the last two months. This slide reflects the market’s declining confidence in a number of the high-flying Fast Casual players’ ability to scale as rapidly as once hoped—with Noodles & Company (NasdaqGS:NDLS), Papa Murphy’s Holdings, Inc. (NasdaqGS:FRSH), Shake Shack Inc. (NYSE:SHAK) and Potbelly Corporation (NasdaqGS:PBPB) having fallen most precipitously. On the Fast Casual M&A front, Atlantic Street Capital Management acquired The Sandwich Shop Holdings Company, a 23 unit Chicago based Jimmy John’s franchisee. In QSR, Burger King (NYSE:QSR) franchisees continue to be active, with a consortium led by Atlanta-based GPS Hospitality acquiring the Michigan-based 60 unit franchisee, King Venture, Inc. from TEAM Schostak Family Restaurants. Additionally, on the Premium Dining end of the spectrum, The ONE Group Hospitality, Inc. (NasdaqCM:STKS), owners of STK, acquired the Katsuya and Cleo brands from Sam Nazarian’s SBE Entertainment Group, LLC.

Median TEV / LTM EBITDA Median TEV / 2015E EBITDA

80

90

100

110

120

130

140

Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15

Segm

ent I

ndex

S&P 500 QSR Fast Casual Family Dining Casual Dining Premium Dining

117

107

128

117116

133

TM Capital’s Restaurant Contacts

James S. Grien Managing Director

[email protected] 404-995-6235

Craig M. Gibson Managing Director


Philip S. Krieger Vice President


Selected TM Capital Restaurant Experience

Same Store Sales by Price Point

(12.5%)

(10.0%)

(7.5%)

(5.0%)

(2.5%)

―

2.5%

5.0%

7.5%

10.0%

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Sam

e St

ore

Sale

s G

row

th

QSR Fast Casual Family Dining Casual Dining Premium Dining

20132009 2010 2011 20122008 2014 2015Sa

me

Stor

e Sa

les

Gro

wth

(100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%

Q3 '08Q4 '08Q1 '09Q2 '09Q3 '09Q4 '09Q1 '10Q2 '10Q3 '10Q4 '10Q1 '11Q2 '11Q3 '11Q4 '11Q1 '12Q2 '12Q3 '12Q4 '12Q1 '13Q2 '13Q3 '13Q4 '13Q1 '14Q2 '14Q3 '14Q4 '14Q1 '15Q2 '15

(100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%


(100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%


(100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%


Qui

ck S

ervi

ceCa

sual

Din

ing

Prem

ium

Din

ing

Quarterly Gainers & Losers by Price Point

Fam

ily D

inin

gFa

st C

asua

l

Decliners / Gainers

(100%) (80%) (60%) (40%) (20%) ― 20% 40% 60% 80% 100%


www.tmcapital.com

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restaurant monthly august 2015 - tm capital...

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