ICV Partners LLC has reached an agreement to acquire Troy, Michigan-based Diversified Restaurant Holdings Inc. in an all-cash transaction valued at approximately $130 million, including the assumption of outstanding indebtedness and transaction expenses.
DRH’s common stockholders will receive $1.05 per share in cash, representing an approximate 123% premium to the company’s closing share price on November 5, and an approximately 111% premium to the 30-day volume weighted average stock price.
“This transaction validates the strength of our franchise, creates a strong future for our employees, and provides a significant platform from which ICV can continue to build, while also rewarding our stockholders for their commitment,” DRH Founder, Executive Chairman and Acting CEO Michael Ansley said in a statement.
“These are exciting times for the Buffalo Wild Wings brand. Inspire Brands has reignited the sports bars with an improved menu, better customer experience and strong support for its franchisees. With the strength of ICV, our franchise can better leverage this effort and further the long history of BWW customer loyalty.”
The transaction is structured as a merger of the company with a newly-formed entity affiliated with New York-based ICV, with DRH continuing as the surviving entity of such merger. DRH is one of the largest franchisees for Buffalo Wild Wings® ("BWW") with 64 sports bars across five states.
The closing of the transaction is subject to stockholder approval, the consent of BWW, and other customary closing conditions. The company and ICV expect to complete the transaction by the end of 2019 or early 2020, following the annual meeting of stockholders at which time the transaction will be an item presented for stockholder approval.
Michael Ansley and Jason Curtis, collectively holding approximately 34% of the outstanding shares of DRH, have entered into voting agreements committing them to, among other things and subject to its terms, vote in favor of adopting the merger agreement.
Duff & Phelps acted as exclusive financial adviser to DRH and provided a fairness opinion to the company’s board of directors in connection with the transaction. Dykema served as legal counsel to DRH. DLA Piper served as legal counsel for ICV in connection with the transaction.