Wings On Sale: ICV Partners To Acquire Diversified Restaurant Holdings

Investors are finding it harder and harder to get their hands on Buffalo Wild Wings. New York investment firm ICV Partners announced Wednesday it will take a major B-Dubs operator, Diversified Restaurant Holdings, Inc SAUC, off the market in an upcoming acquisition.

Investors will receive $1.05 per share in the $130 million all-cash transaction — a 123% premium to the stock’s pre-announcement price.

What Happened

Michigan-based Diversified Restaurants is one of the biggest BWW franchises in the country, with 64 sites across five states.

"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," founder, acting CEO and Chairman Michael Ansley said in a Wednesday press release.

Ansley will leave the operation after the acquisition.

Why It’s Important

Consumer trends are hurting fast casual dining. Diversified Restaurants lost $5 million in 2018, and a few months ago, it abandoned a $22.5-million deal to add nine Chicago stores. ICV is assuming about $96.6 million in outstanding debt and transaction balances.

Investors seemed to appreciate the rescue. The group’s stock soared 120% to break $1 for the first time since April.

What’s Next

Diversified Restaurants will merge with a newly formed affiliate of ICV and remain the surviving entity. Of Diversified Restaurant’s 2,500 employees, the restaurant workers will remain on, but the fate of management is still in discussion.

The transaction is subject to stockholder and BWW approval but has already been cleared by the Diversified Restaurants board. It is on track for completion by early 2020.

Diversified shares were down 1.44% at $1.02 at the time of publication after trading sharply higher in Wednesday's session.

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Photo courtesy of Buffalo Wild Wings.