Five bidders, a mix of strategics and private equity, are vying for the company, one person said. Houlihan Lokey is advising. The auction began one month ago, the source said.
One banker said the sale of Tony Roma’s is a small deal. The company has less than $20 million EBITDA, the banker said. A strategic is expected to acquire Tony Roma’s, the first source said.
Tony Roma’s, of Dallas, is a casual dining chain known for its ribs (I’m told that the St. Louis ribs are meatier and bigger than the Baby Backs). It has 200 restaurants spread through 17 states and 33 countries. Tony Roma’s filed for bankruptcy protection in November 2005. It exited the following March.
Highland Capital, also of Dallas, is an investment firm with $22 billion in assets under management. The firm acquired Tony Roma’s after it emerged from Chapter 11 five years ago.
Tony Roma’s is the latest restaurant chain to go up for sale. Morton’s Restaurant Group, in March, hired Jefferies & Co. to look at strategic options, including a sale. Chicago-based Morton’s is known for its expensive steaks and has $24 million EBITDA. Castle Harlan and Lauren Crown Capital, which own roughly 26% of Morton shares, support the decision to look at options.
Falfurrias Capital is also looking to sell its majority stake in Bojangles, a quick service chain known for its fried chicken. Harris Williams is advising. Bojangles has 488 company-owned and franchised restaurants in 10 states, mainly in the Southeast.
The Bojangles auction is in “mid-process,” a separate source said. The sale has generated much interest and a deal could be concluded by the end of June, the person said. No party is in the lead, the source said.
Highland Capital officials couldn’t be reached for comment.