Cava Buys Zoe’s Kitchen As Restaurant Buyouts Are Still On Menu; Yum China Next?

Privately held Cava buys Zoe’s Kitchen (ZOES) in a deal with an enterprise value of $300 million, the fast casual Mediterranean restaurants said Friday. Yum China (YUMC) could be next, as a wave of restaurant buyouts continues.


Zoe’s said that shareholders will receive $12.75 in cash for each share owned. That’s a 33% premium vs. the company’s 30-day volume weighted average price ending Aug. 16.

The companies expect to close the deal in the fourth quarter. Cava will finance the deal via a significant equity investment led by Act III Holdings. Act III is an investment vehicle created by Panera Bread founder Ron Shaich.

Zoe’s stock jumped 33% to 12.74 on the stock market today.

Cava has 66 restaurants but with Zoe’s will have 327 restaurants in 24 states.

“Now with the addition of Zoe’s Kitchen, we will be able to broaden our geographic footprint and meet the needs of even more guests — whether in Bethesda or Birmingham, Plano or Pasadena — who crave delicious, healthy food without compromise,” Cava CEO Brett Schulman said in a release.

Restaurant Buyouts

Europe’s JAB Holdings, which also owns Caribou Coffee, Peet’s Coffee & Tea and Keurig Green Mountain, bought Panera Bread in July 2017. Roark Capital Group bought Buffalo Wild Wings in November.

Jack In The Box (JACK) sold its Mexican chain Qdoba to Apollo Global Management (APO) in December.

Earlier, Burger King parent Restaurant Brands International (QSR) bought Popeye’s Chicken, while Golden Gate Capital bought Bob Evans Farms’ restaurant business.

Yum China Next?

Shares Of Yum China, which operates KFC, Pizza Hut and Taco Bell outlets in China, has rallied somewhat since late July on reports that a consortium is gearing up to buy the fast-food chain. Yum China stock fell 1.3% Friday.

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