Bruckmann, Rosser, Sherrill & Co has entered into an agreement with Ruth's Hospitality Group, the owner of Ruth's Chris Steakhouse, to acquire up to $25 million in 10% Convertible Preferred shares. A concurrent rights offering of up to $35 million is also being presented to current shareholders of Ruth's. Provided they're able to raise at least $42.5 million from the combined offerings, an amendment to the company's current credit agreement will be put into effect that will reduce Ruth's current revolving loan commitment and modify their debt covenants.
17 restaurant and bar deals have been proposed in 2009, according to the PitchBook Platform. All successful deals, like Friedman Fleischer & Lowe's LBO of Church's Chicken, fall under the category of either family dining or fast food chains. Beside the Ruth's financing announcement, the single other PE-related premium restaurant deal of 2009 was Mill Road Capital's bid for Kona Grill. It failed because Kona felt that it undervalued the company. The dearth of premium or upscale restaurant deals in 2009 is not terribly surprising, given that consumers have drastically reduced their discretionary spending over the last 18 months.