The long-simmering auction of Tony Roma’s appears to be heating up, with the casual dining chain known for its barbecued ribs in talks with several restaurant groups, sources familiar with the process told sister Web site peHub.
Roma’s was reported to be up for sale in April, with Houlihan Lokey advising. Dallas-based Tony Roma’s has nearly 200 restaurants spread through 17 states. It is owned by distress investor
At the time both buyout firms and strategics were said to be eyeing Roma’s, which has EBITDA of less than $20 million. Sources also said that the deal, then supposedly in “mid-process,” would wrap by the end of June—which did not come to pass. Since then, the auction has generated little news.
One sponsor, whose firm bowed out of the Roma’s auction, said in recent days that strategics have become very aggressive lately. However, the executive, who did not want to be identified by name discussing a private transaction, said it wasn’t strategics that prompted his firm to pull out.
Instead, this sponsor said his firm generally doesn’t like to buy from other buyout shops. “There are a lot of reasons why you don’t buy from PE sellers,” the source says. “They’re smart guys. If they’re selling, you have to wonder why and is it a good time for us to buy.”
Also still up for sale is Krystal Co., a Chattanooga, Tenn.-based company known for its inexpensive sliders (small cheeseburgers). Founded in 1932, the company and its franchisees operate more than 350 restaurants in Southeastern 12 states. Krystal Co. announced in August it was looking for an investor in August. It hired Piper Jaffray. The auction is said to be in the second stage of a two-step process. One banker said buyout firms are bidding for the company.
“We are still currently in the sale process along with Piper Jaffray,” a Krystal spokeswoman wrote in an e-mailed response to questions.
(Luisa Beltran is a senior writer for peHub.)