Zoe’s Kitchen sold for $300 million

Zoe’s Kitchen to be acquired by CAVA Group for $12.75 per share

Zoe's Kitchen sold for $300 million, Stockwinners
Zoe’s Kitchen sold for $300 million, Stockwinners

Zoe’s Kitchen (ZOES) announced that it has entered into a definitive agreement to be acquired in a transaction by privately held Cava Group, 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, Zoes Kitchen shareholders will receive $12.75 in cash for each share of common stock they hold.

This represents a premium of approximately 33% to Zoes Kitchen’s closing share price on August 16, 2018 and a premium of approximately 33% to Zoes Kitchen 30-day volume weighted average price ended on August 16, 2018, and an enterprise value of approximately $300M.

The acquisition of Zoes 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 CEO of CAVA, will serve as CEO of the combined company and will work closely with the existing leadership teams at Zoes Kitchen and CAVA to oversee their growth and evolution.

Ron Shaich will serve as Chairman of the combined company.

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 $17M 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 $8.5M termination fee if the Company terminates the merger agreement to accept a superior proposal under certain circumstances. T

he 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.

Zoes 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.


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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

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