Southfield-based Diversified Restaurant Holdings Inc., one of the largest franchisees for Buffalo Wild Wings, is set to acquire nine more restaurants in the Chicago market for $22.5 million.
“Given our excitement with the changes being made at BWW, we believe that prudent, timely expansion will deliver shareholder value," Diversified CEO David G. Burke said in a statement "This transaction is particularly attractive to us because the restaurants are located within our existing Midwest footprint, centered in the Chicago market area where we currently have nine other locations."
Diversified Restaurant Holdings currently has 64 stores across five states.
"With this additional scale, we expect to further leverage our infrastructure, systems, marketing spend and leading operational expertise to drive improved results in these locations," Burke said.
The units being acquired generated $32.7 million in revenue and $4.5 million of EBITDA in 2018, the company said. It expects to complete the purchase in the second quarter, subject to franchisor consent and waiving of its right of first refusal.
“We are evaluating various alternatives to financing this transaction, which presents a tremendous recapitalization opportunity for DRH aimed at adding longer-term stability and driving future value creation," Burke added.