New York-based private equity firm Bruckmann, Rosser, Sherrill & Co. has sold its convertible preferred stock investment in publicly traded Ruth’s Hospitality Group Inc. Ruth’s Hospitality repurchased the stock in a transaction valued at $60.2 million, the firm announced Tuesday. The firm realized a gross multiple of invested capital of approximately 2.6x, and a gross internal rate of return of 60% on its investment, it said.
Bruckmann, Rosser, Sherrill & Co. (“BRS”), a New York-based private equity firm, announced today the successful sale of its convertible preferred stock investment in Ruth’s Hospitality Group, Inc. (Nasdaq: RUTH) (“Ruth’s Hospitality” or the “Company”). Ruth’s Hospitality repurchased the convertible preferred stock in a transaction valued at $60.2 million. BRS realized a gross multiple of invested capital of approximately 2.6x and a gross internal rate of return of 60% on its investment.
BRS invested in Ruth’s Hospitality in February 2010. The proceeds from BRS’s investment, together with a common stock rights offering, were used to reduce Ruth’s Hospitality’s outstanding debt and provide the Company with additional financial flexibility. Ruth’s Hospitality operates a portfolio of fine dining restaurants under the brands Ruth’s Chris Steak House, Mitchell’s Fish Market, Mitchell’s Steakhouse and Cameron’s Steakhouse.
“We are proud to have supported Ruth’s Hospitality and delighted with the outcome of our investment,” said Stephen Sherrill, a Managing Director of BRS. “We enjoyed working with Mike and his team, and we are confident the Company is well-positioned for continued growth in the fine dining segment. We wish the entire management team every success in the future.”
Mike O’Donnell, Chief Executive Officer of Ruth’s Hospitality, stated, “We are grateful to BRS for their financial support and strategic guidance through a difficult economic period. As our Company’s performance continues to improve, we felt this was the appropriate time to repurchase the preferred stock held by BRS. We thank BRS for their contribution to our success and we look forward to continuing to grow our restaurant concepts.”
BRS is among the most experienced and successful private equity investors in the restaurant industry. Since 1995, BRS has completed numerous transactions in the sector, including investments in California Pizza Kitchen, Bravo Brio Restaurant Group, Logan’s Roadhouse, Il Fornaio, Corner Bakery Café, McCormick & Schmick’s, Real Mex Restaurants, Restaurant Associates and Au Bon Bain. BRS is currently seeking investment opportunities for its third investment partnership.
BRS is a New York based private equity firm with $1.4 billion of committed capital under management in three investment partnerships, focused on investing in middle market consumer goods and services businesses. Since 1996, BRS has purchased over 40 portfolio companies for aggregate consideration of over $6.4 billion. In addition, BRS portfolio companies have completed approximately $1.9 billion of add-on acquisitions. Prior to forming the firm, the founders of BRS were in the financial acquisition business at Citicorp Venture Capital where they closed 25 transactions with aggregate transaction values totaling $5.8 billion.