Denny's to Go Private in $620 Million Deal
Last fall, Denny's announced plans to close 150 of its lowest-performing locations. By the end of the second quarter, the chain operated 1,558 restaurants worldwide.
On Monday, Denny's revealed it is being acquired by a group of investors in a deal that will take the breakfast chain private. The company's board unanimously approved the transaction, which values Denny's at $620 million including debt.
Buyers and Deal Details
- The buyers include private equity firm TriArtisan Capital Advisors, investment company Treville Capital, and Yadav Enterprises, one of Denny's largest franchisees.
- Shareholders will receive $6.25 per share in cash for each share of Denny’s common stock, totaling $322 million.
- This represents a 52% premium over Denny's closing stock price on Monday.
Denny's shares surged 47% in after-hours trading following the announcement.
Company Background and Challenges
"Denny’s was founded in 1953 in Lakewood, California, as Danny’s Donuts. The name was changed to Denny’s Coffee Shops in 1959 to avoid confusion with another chain."
The company began trading on the New York Stock Exchange in 1969.
During the COVID-19 pandemic, Denny's sales plummeted along with many casual dining chains. After restrictions eased, it faced challenges adapting to new customer habits, especially increased reliance on delivery services.
Denny's also struggled to compete with newer breakfast chains like First Watch, which emphasize healthier menu options.
"Last fall, Denny’s said it planned to close 150 of its lowest-performing locations."
This marked a strategic effort to streamline operations amid a shifting market landscape.
Summary
The decision to go private aims to help Denny's restructure and better respond to evolving customer preferences while navigating post-pandemic challenges.
Author's Note: Denny's move to privatization and strategic closures reflect its efforts to adapt and regain strength amid competitive and pandemic-driven pressures.