York Capital Management has signed a definitive agreement to acquire HRI, a leading, diversified restaurant company focused on polished casual dining and fine dining. The seller was an affiliate of Goldner Hawn Johnson & Morrison (“GHJ&M”). Financial terms were not disclosed. The transaction is expected to close in December.
Founded in 1972 and located in Leawood, Kansas, HRI develops and owns several restaurant concepts comprising over 90 company owned and franchised locations across the U.S. In the polished casual dining category, the company operates restaurants under the Houlihan’s brand, which offers made-from-scratch food at a compelling value in a contemporary atmosphere. In the fine dining category, the company operates restaurants under the J. Gilbert's Wood-Fired Steaks, Bristol Seafood Grill, and Bar/Devon's Seafood Grill and Bar brands, which offer premium steak and seafood at an approachable value in an elegant yet unpretentious setting.
In connection with the transaction, York Capital is partnering with Michael Archer, an experienced and proven industry veteran, who is personally investing alongside York and other members of the management team and will become chief executive officer of the company following transaction close. Archer’s prior leadership roles include serving as president of Applebee’s within Dine Equity, president of TGI Fridays, COO of Sullivan’s and Del Frisco’s within Lone Star Steakhouse & Saloon, and president of Morton’s The Steakhouse. Bob Hartnett, the current CEO and chairman of HRI, is leaving in connection with the transaction, but has agreed to remain involved with the company in a consultant role.
Regarding the transaction, Archer says, “I am excited to partner with York Capital and the Company’s management team to continue developing HRI into one of the leading diversified restaurant companies in the industry. We are extremely impressed with the company’s quality of food and service, high guest satisfaction, and value proposition and believe there is tremendous opportunity for growth. We plan to continue evolving our existing brands through continually refreshing the menu and meaningfully investing in our restaurant base. We are providing capital and adding to the talented management team in place to support growth through the development of new corporate owned and franchised restaurants across all of the existing concepts. In addition, we believe that HRI represents an attractive platform for growth through the development or acquisition of new concepts.”
“I am proud of what the Company and its employees have been able to achieve during my tenure,” Hartnett says. “As part of their diligence, York Capital and Mike visited all of the company restaurants, and we spent a substantial amount of time with them. I believe that York Capital and Mike Archer represent ideal partners to continue growing and evolving HRI and its concepts. I am excited to be working with them to help grow the company.”
Duff & Phelps acted as exclusive financial adviser and Faegre Baker Daniels served as legal counsel to HRI in the transaction. Goodwin Procter served as legal counsel to York Capital.