Piccadilly Cafeterias (“Piccadilly”) is one of the largest cafeteria restaurant chains in the United States and is the dominant one in the Southeastern and Mid-Atlantic regions. Founded in 1944, Piccadilly currently operates 130 cafeterias in 15 states. The Company generated approximately $260 million in net sales in the first twelve months following acquisition.
Piccadilly serves a diverse customer base consisting of families, friends, co-workers, senior citizens, couples and students. The Company’s patrons enjoy a wide selection of healthy, freshly-prepared, home-cooked style meals at value-oriented prices. Piccadilly Cafeterias are open for lunch and dinner seven days a week. Each cafeteria general manager has the ability to vary the menu to include local and seasonal favorites from the Company’s extensive selection of proprietary recipes. Piccadilly’s corporate headquarters is located in Baton Rouge, Louisiana and system wide currently employs approximately 6,000 employees.
Investment Considerations Were:
The Acquisition Process:
On October 29, 2003, (the “Petition Date”) Piccadilly Restaurant, Inc. (the Debtor) filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code in the Southern District of Florida (Case No. 03-27976-BKC-RBR) (the “Bankruptcy Court”), Judge Raymond B. Ray presiding.
In conjunction with the Chapter 11 filing, Piccadilly Cafeterias, Inc entered into an Asset Purchase Agreement, as amended (the “APA”) with Piccadilly Acquisition Corporation (the “Stalking Horse”) to sell substantially all of its assets for $54 million in cash, subject to certain adjustments. The APA authorizes the Debtor to solicit higher and better bids for the assets pursuant to sale and auction procedures approved by the Court. On December 10, 2003, the Bankruptcy Court approved such auction and sale procedures. The approved sale procedures and the outcome are summarized as follows:
Alternate bids had to be submitted not later than 4:00 p.m. Prevailing Eastern Time on February 6, 2004 (the “Bid Deadline”) in the minimum amount of $55,820,000 (subject to the closing price adjustments and assumption of liabilities in the APA), which PRIG and Yucaipa submitted.
Alternative bidders had to provide an earnest money deposit by cashiers’ check or wire transfer to Seller’s counsel in the amount of $1,620,000, and satisfy certain other requirements detailed in the Amended Bid Procedures Order, and deliver the New Alternate Buyer Escrow Agreement, to become a “Qualified Bidder”, which PRIG delivered.
PRIG and Yucaipa became a Qualified Bidder by the Bid Deadline, and an auction was held on February 11, 2004 in the Miami offices of Berger Singerman, counsel to the Debtor.
PRIG and Yucaipa successfully won the bid by outbidding H.I.G.
PRIG and Yucaipa’s winning bid was $80,000,000 ($67,000,000 Cash and $13,000,000 of assumed Liabilities).
A Bankruptcy Court hearing was held on February 13, 2004 to seek court approval for PRIG and Yucaipa’s bid at the auction.
PRIG and Yucaipa received Bankruptcy Court approval on February 13, 2004.
PRIG and Yucaipa closed on the transaction on March 16, 2004.
Note: THIS IS ONLY A SUMMARY, which includes certain projections with respect to the anticipated future performance of Piccadilly. Such projections represent predictions of future events based on various assumptions concerning anticipated results, which may or may not be correct, and should not be relied upon to indicate the actual results that will be obtained.