Restaurant Monthly June 2013

Restaurant Monthly
June 2013
Restaurant Industry Commentary
Restaurant sales were largely flat in June after a three-month stretch of positive comparable sales growth. Nonetheless, all restaurant
segment index valuations improved in the month of June compared to May. QSR performed particularly well for the month, despite
weather-related lagging beverage sales. Overall, the TM Capital Restaurant Stock Index has increased 34% year to date, compared to only
15% growth for the S&P 500. This month, we welcome a new addition to our Index - Denver, CO-based fast-casual concept Noodles &
Company - after its hot June 28 initial public offering. Initially priced at $18 per share, the stock opened at $32 on its first day of trading and
has risen more than 34% in the last two weeks; it is currently trading at an astonishing 38.8x LTM EBITDA. M&A activity furthered its second
quarter pickup in June. Of particular note, Atlanta, GA-based private equity investor Roark Capital is rumored to be nearing a deal to acquire
casual dining chain Miller’s Ale House from KarpReilly at a valuation reportedly in excess of $250 million, or 8.5 - 10.5x EBITDA. Additionally,
Boca Raton, FL-based Sun Capital Partners completed its $300 million leveraged buyout of casual hamburger chain Johnny Rockets.
Current Restaurant Valuations by Price Point (TEV / EBITDA)
18.0x
14.3x
12.0x
16.9x
15.0x
12.0x
8.9x
9.1x
9.8x
9.7x
9.3x
9.4x
6.0x
13.3x 13.8x
13.8x
13.3x
—
13.3x
8.5x
8.5x
8.0x Service
Quick
8.9x
8.0x
9.1x 8.9x
9.1x
7.8x
Fast Casual
7.4x 7.8x
Family
7.4x
Median TEV / LTM EBITDA
Dining
Casual Dining
Premium Dining
Median TEV / 2013P EBITDA
Segment Index
Segment Index
Public Market Performance (Latest Twelve Months)
155
150
145
140
135
130
125
120
115
110
105
100
95
90
85
155
150
145
140
135
130
125
120
115
110
105
100
95
90
85
151
149
139
136
125
112
Jul-12Jul-12Aug-12
Aug-12Sep-12
Sep-12Oct-12
Oct-12 Nov-12
Nov-12 Dec-12
Dec-12 Jan-13
Jan-13
S&P 500
S&P 500
Feb-13
Jun-13
Feb-13 Mar-13
Mar-13 Apr-13
Apr-13 May-13
May-13
Jun-13
QSR
Fast-Casual
Family
Dining
Casual
Dining
Premium
QSR
Fast-Casual
Family Dining
Casual Dining
Premium
Jul-13
Jul-13
Recent Restaurant M&A Activity
Closed /
Announced
06/18/2013
05/24/2013
04/16/2013
04/09/2013
02/15/2013
01/15/2013
01/09/2013
01/02/2013
12/29/2012
12/26/2012
12/17/2012
12/10/2012
11/26/2012
11/06/2012
Target
Acquiror
The Johnny Rockets Group, Inc.
Sun Capital Partners, Inc.
Mastro's Restaurants, LLC
Landry's, Inc.
Tokyo Joe's
Gridiron Capital, LLC
Mac Parent LLC
Ignite Restaurants Group, Inc.
Mimi's Café, LLC
Le Duff America Inc.
20 McCalister's stores in OK, KS and MO
The Saxton Group Limited
Fast Fresh Italian, LLC
DiNella Hospitality llc
Pacific Island Restaurants, Inc.
Nimes Capital
Goldco, LLC and 33 BK stores in Broward County, FL PNC RiverArch Capital
Tacala LLC and Boom Foods LLC
Altamont Capital Partners
Caribou Coffee Company, Inc
The Joh. A. Benckiser Group
Southern California Pizza Company, LLC
Sterling Investment Partners
49 Popeyes in San Antonio and Houston
Z&H Foods Inc.
120 KFCs in mid-Atlantic
Mitra QSR KNE, LLC / Chalak Growth Capital
Enterprise
Value
$300.0
NA
NA
$55.0
$50.0
NA
NA
NA
NA
NA
$310.0
NA
NA
NA
EBITDA / Value
Multiple
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
$27.4
NA
NA
NA
/
/
/
/
/
/
/
/
/
/
/
/
/
/
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
11.3x
NA
NA
NA
Industry
Segment
Casual
Premium
Fast Casual
Casual
Casual
Fast Casual
Fast Casual
QSR
QSR
QSR
QSR
QSR
QSR
QSR
($ in millions)
Indices consist of all publicly-available information for restaurant operators in their respective price points. For full listing, please contact the TM Capital Restaurant Practice.
S&P 500
Quarterly Gainers & Losers
by Price Point
Fast Casual
-100%
Family Dining
Casual Dining
Casual Dining
Premium
7.5%
5.0%
2.5%
―
(2.5%)
(5.0%)
(7.5%)
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
(12.5%)
Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 Q3 2009 Q1 2010 Q3 2010 Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013
QSR
Fast Casual
Family Dining
Casual Dining
Premium Dining
Recent TM Capital Restaurant Experience
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
Q1 '13
Q4 '12
Q3 '12
Q2 '12
Q1 '12
Q4 '11
Q3 '11
Q2 '11
Q1 '11
Q4 '10
Q3 '10
Q2 '10
Q1 '10
Q4 '09
Q3 '09
Q2 '09
Q1 '09
Q4 '08
Q3 '08
Q2 '08
Q1 '08
Q4 '07
Q3 '07
Q2 '07
Q1 '07
-100%
Q1 '13
Q4 '12
Q3 '12
Q2 '12
Q1 '12
Q4 '11
Q3 '11
Q2 '11
Q1 '11
Q4 '10
Q3 '10
Q2 '10
Q1 '10
Q4 '09
Q3 '09
Q2 '09
Q1 '09
Q4 '08
Q3 '08
Q2 '08
Q1 '08
Q4 '07
Q3 '07
Q2 '07
Q1 '07
-100%
Premium Dining
Family Dining
(10.0%)
Q1 '13
Q4 '12
Q3 '12
Q2 '12
Q1 '12
Q4 '11
Q3 '11
Q2 '11
Q1 '11
Q4 '10
Q3 '10
Q2 '10
Q1 '10
Q4 '09
Q3 '09
Q2 '09
Q1 '09
Q4 '08
Q3 '08
Q2 '08
Q1 '08
Q4 '07
Q3 '07
Q2 '07
Q1 '07
-100%
Fast-Casual
Same Store Sales by Price Point
Same Store
Growth
Same
StoreSales
Sales
Growth
Quick Service
Decliners / Gainers
Q1 '13
Q4 '12
Q3 '12
Q2 '12
Q1 '12
Q4 '11
Q3 '11
Q2 '11
Q1 '11
Q4 '10
Q3 '10
Q2 '10
Q1 '10
Q4 '09
Q3 '09
Q2 '09
Q1 '09
Q4 '08
Q3 '08
Q2 '08
Q1 '08
Q4 '07
Q3 '07
Q2 '07
Q1 '07
QSR
TM Capital’s Restaurant Practice
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
Q1 '13
Q4 '12
Q3 '12
Q2 '12
Q1 '12
Q4 '11
Q3 '11
Q2 '11
Q1 '11
Q4 '10
Q3 '10
Q2 '10
Q1 '10
Q4 '09
Q3 '09
Q2 '09
Q1 '09
Q4 '08
Q3 '08
Q2 '08
Q1 '08
Q4 '07
Q3 '07
Q2 '07
Q1 '07
-100%
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
Michael P. Locker
James S. Grien
Philip S. Krieger
Managing Director
mlocker@tmcapital.com
404-995-6252
President and CEO
jgrien@tmcapital.com
404-995-6235
Associate
pkrieger@tmcapital.com
404-995-6242
About TM Capital
TM Capital Corp. is a partner-owned investment banking firm based in New York, Boston and Atlanta, which has completed over 250 transactions with a combined value in excess
of $13.5 billion. Since 1989, we have advised clients navigating a full range of critical transactions, including complex mergers, acquisitions, debt and equity financings, minority and
majority recapitalizations, restructurings, and advisory services including takeover defense, fairness and solvency opinions, valuations, as well as litigation support. We have built deep
industry expertise in key sectors and our team regularly publishes research highlighting current and emerging trends in targeted industries and markets. TM Capital is a member firm
of M&A International Inc., the world’s leading alliance of mid-market investment banks with over 600 M&A professionals in 40 countries. Members have closed over 1,300 transactions
totaling more than $75 billion in value over the past five years. For more information, visit www.tmcapital.com.
New York
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New York, NY 10022
Tel: 212.809.1360
Boston
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Tel: 617.259.2200
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15 Piedmont Center NE
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Atlanta, GA 30305
Tel: 404.995.6230
www.tmcapital.com