$12.75 per share purchase price represents
approximately 33% premium to Zoe’s Kitchen NYSE 30-day volume
weighted average price
Joins together two brands with distinct
service models and a shared passion for healthy, no-compromise
Mediterranean cuisine
Enables additional growth for CAVA and Zoës
Kitchen — leveraging scale and a larger footprint to expand
investments in people, culinary, and tech innovation
Zoe’s Kitchen, Inc., (“Zoës Kitchen” or the "Company")
(NYSE:ZOES), a fast-casual restaurant group with 261 domestic
restaurant locations, today announced that it has entered into a
definitive agreement to be acquired in a transaction by privately
held Cava Group, Inc., (“CAVA”) a fast-growing Mediterranean
culinary brand with 66 restaurants. The combined companies will
have 327 restaurants in 24 states throughout the U.S.
Under the terms of the agreement, Zoës Kitchen shareholders will
receive $12.75 in cash for each share of common stock they hold.
This represents a premium of approximately 33% to Zoës Kitchen’s
closing share price on August 16, 2018 and a premium of
approximately 33% to Zoës Kitchen 30-day volume weighted average
price ended on August 16, 2018, and an enterprise value of
approximately $300 million.
The acquisition of Zoës Kitchen will be financed through a
significant equity investment in CAVA led by Act III Holdings, the
investment vehicle created by Ron Shaich, founder, chairman, and
former CEO of Panera Bread, and funds advised by The Invus Group,
with participation from existing investors SWaN & Legend
Venture Partners and Revolution Growth.
After closing, Brett Schulman, current Chief Executive Officer
of CAVA, will serve as Chief Executive Officer of the combined
company and will work closely with the existing leadership teams at
Zoës Kitchen and CAVA to oversee their growth and evolution. Ron
Shaich will serve as Chairman of the combined company.
COMMENTS BY LEADERSHIP
Kevin Miles, Zoës Kitchen Chief Executive Officer said: “Zoës
Board of Directors and Management are pleased to announce today’s
transaction. Our mission was to deliver the highest value
obtainable for our shareholders and pursuant to the transaction
announced today our shareholders will be receiving a substantial
premium to the Company’s unaffected stock price. I am proud of the
significant work the team has executed over recent years to grow
the Zoës Kitchen footprint, build brand affinity and secure a
leadership position in the Mediterranean and better-for-you
category. These efforts made it an attractive candidate for a
transaction of this kind. I’d like to thank each and every team
member who will continue to make Zoës a differentiated dining
experience every day.”
Brett Schulman, CAVA Chief Executive Officer said: “Today’s
announcement is an exciting milestone for CAVA, and we’re thrilled
to welcome Zoës Kitchen to our family. Together, these two brands
are united by a shared heritage and passion for exceptional
Mediterranean cuisine. Now with the addition of Zoës 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. As
part of the CAVA family, Zoës Kitchen will benefit from CAVA’s
track record of bold culinary innovation and leveraging data and
technology to drive growth and convenience.”
Ron Shaich, Act III Holdings Chief Executive, CAVA board member,
and CAVA investor said: “As a close observer of the fast-casual
restaurant industry, I am thrilled at the prospect of what CAVA and
Zoës Kitchen can accomplish together. Together these businesses
will create the leading company in one of the most important
categories in fast casual today — Mediterranean — with the
capabilities to drive extraordinary customer satisfaction and
powerful growth.”
TERMS
Consummation of the merger is subject to certain closing
conditions, including the adoption of the merger agreement by the
holders of a majority of the Company’s outstanding common stock,
and the expiration or early termination of all applicable waiting
periods under the HSR Act. CAVA has agreed to pay to the Company a
$17 million termination fee if the merger agreement is terminated
under certain circumstances and the merger does not occur. The
parties expect the merger to close in the fourth quarter of
2018.
Under the terms of the merger agreement, the Company is
permitted to actively solicit, for a 35-day period, alternative
acquisition proposals from potential buyer and business combination
candidates. There can be no assurance that any superior proposals
will be received during this solicitation process or that any
alternative transaction providing for a superior proposal will be
consummated. Except as may be required by law, the Company does not
intend to disclose any developments with respect to such a
solicitation process unless and until the Company’s board of
directors determines that it has received a superior proposal. The
Company would be required to pay to CAVA an $8.5 million
termination fee if the Company terminates the merger agreement to
accept a superior proposal under certain circumstances.
The Company’s Board of Directors has determined that the merger
agreement with CAVA is fair to and in the best interests of the
Company and the holders of the Company’s common stock.
Zoës Kitchen also announced that it will not hold its previously
scheduled second quarter 2018 earnings conference call and web
simulcast on the morning of Friday, August 17 and will not issue a
press release with second quarter 2018 financial results. The
Company expects to file its quarterly report with second quarter
2018 financial results on or before August 20, 2018.
TRANSACTION ADVISORS
Piper Jaffray served as financial advisor to Zoës Kitchen, and
Greenberg Traurig, LLP acted as legal advisor to Zoës Kitchen on
the transaction.
Morgan Stanley & Co. LLC acted as financial advisor to Act
III Holdings (Ron Shaich) and The Invus Group. Citigroup Global
Markets Inc. acted as financial advisor to CAVA. Skadden, Arps,
Slate, Meagher & Flom acted as legal advisors to CAVA. Sullivan
& Cromwell and Simpson Thacher & Bartlett served as legal
advisors to Act III Holdings (Ron Shaich) and The Invus Group,
respectively.
About Zoës Kitchen
Founded in 1995, Zoës Kitchen is a fast-casual restaurant group
serving a distinct menu of fresh, wholesome, made-from-scratch,
Mediterranean-inspired dishes delivered with warm hospitality. With
no microwaves, or fryers, grilling is the predominate method of
cooking along with an abundance of fresh fruits and vegetables,
fresh herbs, olive oil and lean proteins. With 261 locations in 20
states across the United States, Zoës Kitchen delivers goodness to
its guests by sharing simple, tasty and fresh Mediterranean meals
that inspire guests to lead a balanced lifestyle and feel their
best from the inside out. For more information, please visit
www.zoeskitchen.com, Facebook, Instagram, Twitter or follow
#LiveMed.
About CAVA
CAVA was born out of a desire to fuel full lives through a bold
and innovative food culture rooted in the heritage of the culinary
brand’s founders Ted Xenohristos, Ike Grigoropoulos and Executive
Chef Dimitri Moshovitis. The three first-generation Greek Americans
are childhood friends who wanted to bring the authentic
Mediterranean flavors and experiences of their Greek upbringing to
a wider audience in a modern, accessible format. The trio then
partnered with CAVA CEO Brett Schulman to grow the company.
Together, CAVA has evolved into an organization with more than 60
chef-casual restaurants across 10 states and a successful line of
chef-crafted dips and spreads sold in more than 250 Whole Foods
Market locations and other speciality grocery stores around the
country. By the end of 2018, CAVA will have 75 locations
nationwide. For a full list of open and upcoming locations,
visit: cava.com/locations. For more information, please
visit www.cava.com and follow CAVA on social media.
About ACT III Holdings
Act III Holdings is a Boston-based investment fund formed by Ron
Shaich, founder and chairman of Panera Bread. Act III is actively
making evergreen investments in restaurant and consumer-facing
enterprises that are building better competitive alternatives and
have the potential to dominate significant market niches. Act III
portfolio companies benefit from the experience of Act III’s
partners in building companies of value and with values. Existing
Act III investments include Cava, Clover Food Lab, Open World,
Tatte Bakery and Life Alive Organic Cafe.
About The Invus Group
Invus is a private investment firm based in New York. Invus
benefits from an evergreen investment structure managing family
capital with a long-term strategic perspective. Invus and its
affiliates have been investing in companies that seek to transform
their industries since 1985. For more information, please visit at
http://www.invus.com.
Forward-Looking Statements
This press release includes forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These forward-looking statements include, but are not
limited to, statements regarding the Company’s proposed merger
transaction with CAVA, the financing of the proposed merger
transaction, all statements regarding the Company’s expected future
financial position, results of operations, cash flows, dividends,
financing plans, business strategy, budgets, capital expenditures,
competitive positions, growth opportunities, plans and objectives
of management, and statements containing the words such as
“anticipate,” “approximate,” “believe,” “plan,” “estimate,”
“expect,” “project,” “could,” “would,” “should,” “will,” “intend,”
“may,” “potential,” “upside,” and other similar expressions. All
statements in this press release that are not historical facts, are
forward-looking statements that reflect the best judgment of the
Company based upon currently available information.
Such forward-looking statements are inherently uncertain, and
shareholders and other potential investors must recognize that
actual results may differ materially from the Company’s
expectations as a result of a variety of factors, including,
without limitation, those discussed below. Such forward-looking
statements are based upon management’s current expectations and
include known and unknown risks, uncertainties and other factors,
many of which the Company is unable to predict or control, that may
cause its actual results, performance or plans to differ materially
from any future results, performance or plans expressed or implied
by such forward-looking statements. These statements involve risks,
uncertainties and other factors discussed below and detailed from
time to time in the Company’s filings with the Securities and
Exchange Commission (the “SEC”).
Risks and uncertainties related to the proposed merger include,
but are not limited to, the risk that the Company’s stockholders do
not approve the merger, potential adverse reactions or changes to
business relationships resulting from the announcement or
completion of the merger, uncertainties as to the timing of the
merger, adverse effects on the Company’s stock price resulting from
the announcement of the merger or the failure of the merger to be
completed, competitive responses to the announcement of the merger,
the risk that regulatory, licensure or other approvals required for
the consummation of the merger are not obtained or are obtained
subject to terms and conditions that are not anticipated,
litigation relating to the merger, the inability to retain key
personnel, and any changes in general economic and/or
industry-specific conditions.
In addition to the factors set forth above, other factors that
may affect the Company’s plans, results or stock price are set
forth in its most recent Annual Report on Form 10-K and in its
subsequently filed reports on Forms 10-Q and 8-K.
Many of these factors are beyond the Company’s control. The
Company cautions investors that any forward-looking statements made
by it are not guarantees of future performance. The Company
disclaims any obligation to update any such factors or to announce
publicly the results of any revisions to any of the forward-looking
statements to reflect future events or developments.
Additional Information and Where to Find It
The Company will furnish to the SEC a report on Form 8-K
regarding the proposed transaction described in this announcement,
which will include the merger agreement. All parties desiring
details regarding the merger are urged to review these documents,
which will be available at the SEC’s website
(http://www.sec.gov).
This press release does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. This communication may be deemed to be
solicitation material in respect of the proposed merger. In
connection with the merger, the Company will prepare and mail a
proxy statement to its shareholders. These documents will be filed
with or furnished to the SEC. Investors and shareholders are urged
to read carefully and in their entirety these materials and other
materials filed with or furnished to the SEC when they become
available, as they will contain important information about the
Company, the merger and related matters. In addition to receiving
the proxy statement by mail, shareholders also will be able to
obtain these documents, as well as other filings containing
information about the Company, the merger and related matters,
without charge, from the SEC’s website (http://www.sec.gov). In
addition, these documents can be obtained, without charge, by
sending an e-mail to investorrelations@zoeskitchen.com, along with
complete contact details and a mailing address.
Participants in Solicitation
The Company and certain of its directors, executive officers and
other members of management and employees may, under SEC rules, be
deemed to be “participants” in the solicitation of proxies from
shareholders with respect to the merger. Information regarding the
persons or entities who may be considered “participants” in the
solicitation of proxies will be set forth in the proxy statement
relating to the merger when it is filed with the SEC. Information
regarding the directors and executive officers of the Company is
set forth in the proxy statement for the Company’s 2018 Annual
Meeting of Stockholders, which was filed with the SEC on April 24,
2018. Additional information regarding the interests of such
potential participants will be included in the proxy statement and
the other relevant documents to be filed with the SEC.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180817005056/en/
CAVABen Famous, 614-935-3727media@cava.comorBrunswick
(for CAVA)Alex Finnegan,
202-264-9544cava@brunswickgroup.comorEmily Levin,
202-617-8582cava@brunswickgroup.comorZoës KitchenCasey
Shillingcaseyshilling@zoeskitchen.comorICR (for Zoes
Kitchen)Fitzhugh Taylor, 214-436-8765
x284Fitzhugh.Taylor@icrinc.com
Grafico Azioni ZOE'S KITCHEN, INC. (NYSE:ZOES)
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Grafico Azioni ZOE'S KITCHEN, INC. (NYSE:ZOES)
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