Avado Brands Announces Pending Sale of Its McCormick & Schmick's Brand
MADISON, Ga., June 8, 2001 /PRNewswire/ -- Avado Brands, Inc. (Nasdaq: AVDOC) today announced that it has entered into a definitive contract with Bruckmann, Rosser, Sherrill & Co., Inc. and Castle Harlan, Inc. for the sale of the Company's McCormick & Schmick's brand for $123.5 million in cash. The Company intends to apply the proceeds from the sale, which is expected to close during the third quarter, to pay off its revolving credit facility, to pay fees and expenses associated with the transaction, and for general corporate purposes. Completion of the sale is contingent upon customary closing conditions, including consents from landlords, governmental agencies and others. Credit Suisse First Boston Corporation served as financial advisor to the Company on this transaction.
The Portland, Oregon-based McCormick and Schmick's was originally acquired by Avado Brands from Castle Harlan, Inc. in March of 1997. Since that time, the brand has more than doubled in size from 16 to 34 restaurants. Members of McCormick & Schmick's current management team, which includes co-founders Bill McCormick and Doug Schmick, are expected to continue in their current positions after the completion of the transaction. Mr. McCormick has tendered his resignation from Avado Brands' Board of Directors in conjunction with the signing of the sales contract.
McCormick & Schmick's is one of four proprietary brands owned by Avado Brands and represents 34 of the 253 restaurants currently operated by the Company. McCormick & Schmick's contributed $162.4 million to total company sales of $685.8 million for the year ended December 31, 2000 and approximately $20.4 million to the Company's total EBITDA of $55.1 million.
Avado Brands owns four decentralized brands, operating 14 Canyon Cafe restaurants, 131 Don Pablo's Mexican Kitchens, 74 Hops Restaurant -- Bar -- Breweries and 34 McCormick & Schmick's seafood dinner houses.
Statements contained in the press release that are not historical facts are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. All forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Factors that may cause actual results to differ from the forward-looking statements contained in this release and that may affect the Company's prospects in general are described in Exhibit 99.1 to the Company's Form 10-Q for the fiscal quarter ended April 2, 2000, and the Company's other filings with the Securities and Exchange Commission.