Diversified Restaurant Holdings Announces Its Intention to Spin Off Bagger Dave’s Restaurants
August 04 2016 - 4:15PM
Diversified Restaurant Holdings, Inc. (NASDAQ:SAUC) ("DRH" or the
"Company"), the largest franchisee for Buffalo Wild Wings® ("BWW")
and creator and operator of Bagger Dave's Burger Tavern® ("Bagger
Dave's"), today announced its intention to split into two separate,
publicly-traded companies through the tax-free spinoff of its
Bagger Dave’s business to DRH stockholders. The Company
previously announced on May 24, 2016 that it was evaluating
strategic alternatives for its Bagger Dave’s restaurants and
brand.
Michael Ansley, Chairman, President and CEO, commented,
"Following a comprehensive analysis of various strategic
alternatives for Bagger Dave’s, the Board and management team
concluded that the separation of our BWW and Bagger Dave’s
businesses is the best alternative for the Company and our
shareholders. The separation recognizes that the BWW and
Bagger Dave’s concepts are distinct in many respects:
- BWW is a franchise brand, whereas we own the Bagger Dave’s
brand.
- BWW is a mature brand, while Bagger Dave’s is still in its
early stages.
- Bagger Dave’s has a much more complex menu and, therefore, more
complex food preparation processes.
- And, we have learned that Bagger Dave’s complexity requires
different management and personnel.
Separating these two very different businesses will enable each
to better pursue their strategies and growth plans
independently.”
The company to be formed with the proposed spinoff of the Bagger
Dave’s business will own and operate 19 Bagger Dave’s restaurants,
which had revenue of $10.7 million in the first half of 2016.
It will trade in the over-the-counter (OTC) market. DRH will
continue to own and operate its 64 franchised BWW restaurants and
be listed on the NASDAQ exchange.
DRH is currently developing a comprehensive separation plan for
the proposed spinoff. The separation plan, including
transaction structure, timing, composition of senior management and
the Boards of Directors, capital structure and other matters, will
be subject to approval by the DRH Board of Directors and customary
regulatory requirements. The Company expects to complete the
spinoff in the fourth quarter of 2016. Additional information
will be provided as the separation process moves forward.
Mr. Ansley concluded, “Over the last year, we invested
considerable resources and time to improve the Bagger Dave’s
concept, which included rationalizing underperforming locations,
making changes in management and improvements in operations while
enhancing our customer touch points. The greater focus on our
BWW business and its significantly larger size, limits the
attention and resources we can apply to Bagger Dave’s, which
ultimately restricts our ability to build on the recent success of
its redefined concept. As an independent company, we believe
Bagger Dave’s will be in a much better position to leverage its
redefined concept to drive growth.”
About Diversified Restaurant Holdings, Inc.
Diversified Restaurant Holdings, Inc. operates 64 BWW franchised
restaurants in key markets in Florida, Illinois, Indiana, Michigan
and Missouri. The Company also owns and operates 19 Bagger
Dave's restaurants in Indiana, Michigan and Ohio. The Company
routinely posts news and other important information on its website
at www.diversifiedrestaurantholdings.com.
Safe Harbor StatementThe information made
available in this news release contains forward-looking statements
which reflect DRH's current view of future events, results of
operations, cash flows, performance, business prospects and
opportunities. Wherever used, the words "anticipate," "believe,"
"expect," "intend," "plan," "project," "will continue," "will
likely result," "may," and similar expressions identify
forward-looking statements as such term is defined in the
Securities Exchange Act of 1934. Any such forward-looking
statements are subject to risks and uncertainties and the Company's
spinoff, actual growth, results of operations, financial condition,
cash flows, performance, business prospects and opportunities could
differ materially from historical results or current expectations.
Some of these risks include, without limitation, receiving
regulatory and other approvals for the spinoff, the impact of
economic and industry conditions, competition, food and drug safety
issues, store expansion and remodeling, labor relations issues,
costs of providing employee benefits, regulatory matters, legal and
administrative proceedings, information technology, security,
severe weather, natural disasters, accounting matters, other risk
factors relating to business or industry and other risks detailed
from time to time in the Securities and Exchange Commission filings
of DRH. Forward-looking statements contained herein speak only as
of the date made and, thus, DRH undertakes no obligation to update
or publicly announce the revision of any of the forward-looking
statements contained herein to reflect new information, future
events, developments or changed circumstances or for any other
reason.
For more information, Investors and Media contact:
Deborah K. Pawlowski
Kei Advisors LLC
716.843.3908
dpawlowski@keiadvisors.com
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