Outlook Positive for CPKI Following Deal with Golden Gate, says Keybanc Analyst

Golden Gate Capital's acquisition of California Pizza Kitchen (CPKI) means good things for both firms, according to Brad Ludington, analyst for Keybanc Capital Markets. The agreed-upon $18.50 per share “puts valuation in line with recent deals and with the peer group,” says Ludington. CPKI may even shrug off worries about commodities prices, a constant problem for the restaurant industry as of late. High food and gas prices are already “baked-in” to CPKI's business practices, giving the company's bottom line a solid defense against the volatile commodities market. According tos Ludington these factors will make CPKI a strong performer for Golden Gate. Golden Gate's deal, should it be approved by shareholders, would make CPKI a privately-held firm. But other firms may be looking to acquire CPKI as well: another investment group is said to be considering a leveraged buyout for $19.50 a share. Listen to the full podcast for more details about California Pizza Kitchen and how it sizes up against other pizza companies.