Red Robin Gourmet Burgers Inc. said today that its Red Robin International Inc. unit will buy 18 franchised Red Robin restaurants in California for $47.5 million from Top Robin Ventures Inc. and Morite of California.
The Greenwood Village, Colo., chain expects to acquire 17 of the restaurants by June 17, according to a Securities and Exchange Commission filing. It plans to operate the remaining eateries under a management agreement to be executed on the closing date.
Red Robin Gourmet Burgers said the acquisition will be paid in cash, funded through borrowings under the unit’s credit line.
The agreement provides for up to an additional $3 million to be paid to the sellers, assuming the acquired restaurants achieve certain 2007 sales targets, Red Robin Gourmet Burgers said.
First-quarter target sales for the acquired restaurants have already been met so the sellers will receive around $1 million of the additional pool at the deal’s closing. The rest will be paid out in quarterly installments based on the level of sales through the rest of 2007.
Red Robin Gourmet Burgers shares fell 29 cents to $42.70 in afternoon trading on the Nasdaq Stock Market.
