Brazilian steakhouse chain Fogo de Chao Inc., in search of funding for international expansion, agreed to sell itself to private equity firm Rhone Capital for $560 million.
The price of $15.75 a share, to be paid in cash, represents a 25 percent premium over the restaurant company’s closing price on Feb. 16. The deal, expected to close in the second quarter, was unanimously approved by the board of Dallas-based Fogo de Chao, the companies said Tuesday.
“They have a global growth view,” Chief Executive Officer Larry Johnson said in an interview, referring to Rhone. “The way that they view the world meshes very well with where Fogo is and where Fogo can go.”
Fogo already is growing in the Middle East and Mexico, and now is looking to open restaurants in Europe and Asia, including China, Johnson said. Rhone said in the statement that its “longstanding and expanding presence” in Brazil will also complement the international strategy.
Shares of Fogo rose as high as $15.80 in New York Tuesday. They had already advanced 8.2 percent this year through Friday’s close.
In the U.S., the chain has 38 restaurants, and this number could expand to 100 or more in the long-term, Johnson said.
The restaurant industry has seen a string of acquisitions as chains fight for market share amid changing consumer preferences and greater offerings of prepared food by supermarkets. JAB Holding Co. bought Au Bon Pain for an undisclosed amount in November, and Roark Capital Group acquired Buffalo Wild Wings Inc. for about $2.4 billion the same month.
While Fogo de Chao is known for its Brazilian-style cuts of meat, it recently has tried to lure non-meat eaters as well. The chain last year revamped its salad bar with items including lentil quinoa salad and vegan carrot ginger soup. It also increased its bar appetizers to bring customers in with lower-priced fare.
Jefferies LLC served as Fogo de Chao’s financial adviser. JPMorgan Chase & Co. did the same for Rhone Capital, which is a New York-based company with more than $5 billion in assets under management.
To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net.
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Jonathan Roeder, Lisa Wolfson
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