Buca, Inc. to Acquire Nine Restaurants in the Boston and Philadelphia Markets
MINNEAPOLIS/PRNewswire/ — Buca, Inc. (Nasdaq: BUCA – news) today announced the execution of a purchase agreement to acquire the nine-unit Vinny Testa’s concept based in Boston. The agreement calls for the nine restaurants to be acquired in a cash transaction valued at approximately $18 million. The transaction, scheduled to close by mid-January, is subject to the completion of final due diligence.
Joseph P. Micatrotto, chairman, CEO and president of Buca, Inc. stated, “The Vinny Testa’s concept is a strong brand in the Boston market, where they operate eight restaurants, with a ninth successful restaurant operating in the Philadelphia market. This transaction allows Buca, Inc. to immediately establish a strong presence in Boston, the fourth largest market in the United States. The average Vinny Testa’s restaurant generates approximately $3.8 million in annual sales and $700,000 in restaurant-level cash flow. Because of the strong performance of these restaurants, we expect the acquisition will contribute to earnings per share in 2002. We plan to have a conference call to discuss our expectations in greater detail after the transaction closes.
“While the Buca di Beppo brand and the Vinny Testa’s brand each have their own distinct image, personality, and positioning, there are tremendous operating synergies between the two concepts. Our strategy is to continue to operate and grow the Vinny Testa’s brand in Boston and throughout New England and to continue to operate and grow the Buca di Beppo brand throughout the remainder of the United States. We believe that the Vinny Testa’s concept can add additional capacity of approximately 40 restaurants to the Buca di Beppo domestic capacity of approximately 450 restaurants.
“We are also pleased to announce that we have executed a term sheet with our bank group, led by Bank of America, to increase our credit facility from the current $25 million maximum to a new facility with a maximum capacity of $50 million,” continued Micatrotto. “This new facility is a combination of a $20 million term facility and a maximum $30 million line of credit. Given the current interest rate environment, we believe it is prudent to fund this acquisition with debt.
“The business at our core Buca di Beppo brand continues to steadily improve and we are confident of our fourth quarter projection of net income of 14 cents per share. Both our comparable restaurant sales trends and our new restaurant sales trends continue to improve, with comparable restaurant sales turning positive in the month of December and our new restaurants’ average weekly sales exceeding $60,000 per week for the first time since Sept. 11. Average weekly sales at our new restaurants have increased more than 40 percent since Sept. 11. This improvement has been driven by the initiatives we implemented after Sept. 11 in addition to holiday sales momentum. We continue to see great growth from Buca Per Due as well as in our take out business. We believe that these trends are a firm foundation as we move forward into fiscal 2002.”
Buca, Inc., a public company headquartered in Minneapolis, owns and operates Buca di Beppo restaurants, a collection of 68 highly acclaimed immigrant Southern Italian restaurants in Arizona, California, Colorado, Florida, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Missouri, Nebraska, Nevada, New York, Ohio, Pennsylvania, Texas, Utah, Washington, Wisconsin and the District of Columbia.
SOURCE: Buca, Inc.