Market Overview

Goodbye, Ruby Tuesday

Goodbye, Ruby Tuesday

After posting yet another dismal quarterly report, with 15.3-percent annual revenue declines and accelerating comps deterioration, Ruby Tuesday, Inc. (NYSE: RT) announced Monday its sale to NRD Capital for a total enterprise value of $335 million.

"NRD Capital has a distinguished track record of achieving and maintaining profitable growth for restaurant concepts and will be an excellent partner to lead Ruby Tuesday going forward,” Stephen Sadove, non-executive chairman of Ruby Tuesday, said in a press release.

The agreement includes NRD’s acquisition of all common stock for $2.40 per share and represents a premium of about 21 percent.

The private equity firm will build upon its portfolio of Frisch’s and Fuzzy’s Taco Shop and will leverage experience working with Domino’s Pizza, Inc. (NYSE: DPZ), Popeyes Louisiana Kitchen Inc (NASDAQ: PLKI) and other reputable restaurants.

"With a well-established brand, differentiated from other casual dining restaurants by its Garden Bar, we see significant opportunities to drive value for Ruby Tuesday," Aziz Hashim, founder of NRD, said in a release. "We are excited to be part of the company's next chapter.”

The sale, subject to shareholder approval, is expected to be completed between January and March.

Ruby Tuesday’s stock had halved in January off disappointing second-quarter earnings and ultimately bottomed at $1.69 in March, at which time the board announced exploration of strategic alternatives. Shares immediately rebounded, but eventually slipped back to Friday’s $1.99.

At the time of publication, shares opened up 19.6 percent at $2.38.

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Image Credit: By Kirk Allen, CC BY 3.0, via Wikimedia Commons


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