Denny's Agrees to $620 Million Take-Private Deal
Denny's announced on Monday that it will be acquired by a group of investors in a deal that will take the breakfast chain private. The company's board unanimously approved the transaction, valuing Denny's at $620 million including debt.
Details of the Acquisition
- Denny's shareholders will receive $6.25 per share in cash for each share of common stock they own.
- The total payout to shareholders amounts to $322 million.
- This offer represents a 52% premium over Denny's closing stock price on Monday.
- Following the announcement, Denny's shares rose 47% in after-hours trading.
Buyers Involved in the Deal
The company will be acquired by:
- Private equity firm TriArtisan Capital Advisors
- Investment firm Treville Capital
- Yadav Enterprises, one of Denny's largest franchisees
Company Background and Challenges
Denny's was founded in 1953 in Lakewood, California, originally named Danny’s Donuts. The name was changed to Denny’s Coffee Shops in 1959 to avoid confusion with another chain. It began trading on the New York Stock Exchange in 1969.
"Denny’s saw its sales plummet during the COVID pandemic and, after restrictions eased, faced shifting customer dining habits, including increased reliance on delivery."
In response to challenges, Denny's announced plans last fall to close 150 of its lowest-performing locations. The chain has also struggled against newer competitors like First Watch, which offer healthier breakfast options.
Current Scale
As of the end of the second quarter, Denny’s operated 1,558 restaurants worldwide.
Summary
Denny's take-private deal reflects a strategic move to restructure amid changing dining behaviors and increased competition following pandemic-related setbacks.
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