Littleton restaurant operator Champps Entertainment Inc. has agreed to be acquired by Kinderhook Industries, a New York private-equity firm.
Champps owns and operates 49 restaurants, and franchises or licenses another 13 in 22 states. Champps has two metro-area restaurants, located at the Park Meadows and Aspen Grove shopping centers, and a third in Colorado Springs.
Under terms of the deal, an investment entity formed by Kinderhook, Champps chairman and chief executive Mi chael O’Donnell and Champps chief financial officer David Womack will pay $75 million in cash for the company. The entity also will assume all of its liabilities, including outstanding debt.
The Champps corporate entity will remain a publicly held company and intends to invest the proceeds from the sale into another business that it did not specify.
Champps’ share price dropped 37 cents Thursday to close at $6.43. Its market capitalization is $84 million.
The company, through Womack, declined to comment on the deal and referred questions to North Point Advisors LLC, which advised the special committee that approved the deal.
North Point and Kinderhook did not return messages.
The deal must be approved by shareholders and includes a provision that allows the company to solicit other offers. If another offer is chosen, however, Champps must pay a $2 million breakup fee.
Champps has operated at a loss in three of the past four quarters. It reported a loss of $42,000 in the most recent quarter and has closed four company-owned restaurants in the past year.
Kinderhook is a $470 million private-equity firm that focuses its investments on noncore divisions of corporate parents, management buyouts of entrepreneur-owned businesses and acquisitions of small-capitalization public companies, according to a press release.
Staff writer Kristi Arellano can be reached at 303-954-1902 or karellano@denverpost.com.
