Wachovia Securities last Friday launched syndication of a $168 million senior secured deal for the leveraged buyout of Logan's Roadhouse. The deal consists of a $30 million revolver and a $138 million term loan "B." Pricing could not be determined by press time.
The deal will partially fund the approximately $486 million acquisition of the restaurant by Bruckmann, Rosser, Sherrill & Co. and Canyon Capital Advisors from current sponsor, and owner of the Cracker Barrel chain, CBRL Group. CBRL began looking into strategic options for divestiture of the company in the fall of 2005 and formally announced its divestiture of Logan's on March 17 to repurchase additional CBRL common stock and reduce debt, according to a spokeswoman. At this time, the company also announced plans of an initial public offering of Logan's shares to be completed in September. The company announced on Oct. 30 that the two private equity firms would acquire the restaurant chain instead.
Moody's Investors Service rated the new credit Ba3 and gave the company a first-time B2 corporate family rating citing high financial leverage, modest free cash flow generation and limited scope and scale. Logan's Roadhouse, based in Nashville, Tenn., owns and operates over 130 company-operated and 23 franchised restaurants in 19 states. Calls to spokesmen at Bruckman and Canyon were not returned by press time.