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 will be acquired by an investor group in a deal that will take the breakfast chain private. The board unanimously approved the agreement, which values the company at $620 million, including debt.
Details of the Acquisition
- Denny’s will be purchased by TriArtisan Capital Advisors, Treville Capital, and Yadav Enterprises, one of its largest franchisees.
- Shareholders will receive $6.25 per share in cash, totaling $322 million.
- This offer represents a 52% premium over Denny’s closing stock price on Monday.
- Denny’s shares rose 47% in after-hours trading following the announcement.
Company Background
Denny’s was founded in 1953 in Lakewood, California, originally named Danny’s Donuts. To avoid confusion with another chain, the name changed to Denny’s Coffee Shops in 1959. The company went public in 1969 on the New York Stock Exchange.
Challenges Faced
Like many casual dining chains, Denny’s sales dropped sharply during the COVID-19 pandemic. After restrictions eased, the chain struggled to adapt to shifting dining habits, including increased reliance on delivery services.
Denny’s has also faced competition as newer chains, like First Watch, offer healthier breakfast options.
"Last fall, Denny’s said it planned to close 150 of its lowest-performing locations."
The acquisition marks a new chapter aimed at revitalizing the brand amid ongoing industry challenges.
Author's summary: Denny’s plans to go private in a $620 million deal after pandemic struggles and growing competition, aiming to reshape its future with new ownership.