P.F. Chang’s China Bistro Inc., the biggest Asian full-servicerestaurant operator in the U.S. by market share, agreed to be takenprivate by Centerbridge Partners LP in a deal valuing the company at $1.1 billion. The takeover would give New York-based Centerbridge, which hasabout $20 billion in capital under management, a chain with almost 400 restaurants under the P.F.
Chang ‘s China Bistro and Pei Wei brands. Centerbridge offered $51.50 ashare in cash, about 30 percent higher than the average share priceover the past 30 days, the companies said Tuesday in a statement. The deal brings the value of private-equity transactions in therestaurant industry over the past two years to $12 billion,according to data compiled by Bloomberg. Restaurant chains havebeen a favorite target for private investors, because theircash-flow makes financing deals easy and brands can benefit fromcost-cutting or expansion measures. “Any potential buyer will pave the way for greater cost scrutiny,potential closures of underperforming units and a more rapidturnaround,” Stephen Anderson , a New York-based analyst at Miller Tabak & Co.
, said in a research note Tuesday about the deal. P.F. Chang’s, which has a China Bistro location in Stamford,climbed 30 percent to $51.48 at the close of trading in New York.The Scottsdale, Ariz.-based company has gained 67 percent thisyear. Burger King Worldwide Holdings Inc., which was taken private in2010 by New York-based 3G Capital Inc. T5 Led Tubes
in a deal valued at $3.3billion, has opened new restaurants in Brazil and Vietnam. Thecompany will go public again after merging with a company owned byWilliam Ackman, it said last month. Last year, Atlanta-based buyout firm Roark Capital Group bought about 82 percent of Arby’s Restaurant Group Inc. fromWendy’s Co. T5 Led Tubes
in a deal valued at $430 million. Arby’s has sought toturn around the brand after revenue under Wendy’s declined from2008 to 2010. Comparable restaurant sales rose about 5.5 percentlast year, and customer traffic trends also improved, chiefoperating officer George Condos said in January. Under the terms of its agreement with Centerbridge, P.F. High Lumen Led Bulbs Manufacturer
Chang’smay solicit proposals from other bidders in the next 30 calendardays. First-quarter revenue was little changed at $318.9 million,according to a separate statement. P.F. Chang’s operated 204 of its Bistro restaurants in 39 statesand 170 Pei Wei locations in 23 states as of Jan. 2, according toits website.
The company operates 16 Bistro locations ininternational markets. `Greater flexibility’ The company has recently tried to boost restaurant sales byintroducing a new lunch menu with items such as ginger chicken withbroccoli and shrimp with lobster sauce for less than $10. Sales at P.F. Chang’s Bistro stores open at least 18 months havedeclined for four straight quarters as other casual-dining chainshave advertised discounts and special deals. Same-store sales fell 0.6 percent at P.F Chang’s Bistro and 1.7percent at Pei Wei due to less traffic in the first quarter, thecompany said Tuesday in the earnings statement.
“Being a private company will provide us with greater flexibilityto focus on our long-term strategic plan of elevating our guestexperience, enhancing our value proposition, growing traffic andimproving the performance of our brands,” Richard Federico , the company’s chief executive officer, said in the statementannouncing the transaction. P.F. Chang’s is the biggest Asian full-service restaurant in theU.S. with about 6 percent of market share, according to Technomic Inc., a Chicago-based researcher. Benihana Inc.
ranks second with 1.7 percent. P.F. Chang’s, which first opened in Scottsdale in 1993, was namedfor its founders Paul Fleming and Philip Chiang . The company’s fast-casual brand, Pei Wei, sells noodle bowls,salads and small plates such as crab wontons and chicken lettucewraps.
Centerbridge was founded by Mark Gallogly , a former Blackstone Group LP executive, and Jeffrey Aronson , who previously led the distressed-investing team at Angelo Gordon & Co. The private-equity firm last year raised $4.25 billion frominvestors for its second fund targeting buyouts and restructurings.