Seeking Alpha

On February 7th, Ignite Restaurant Group (IRG) announced it was acquiring Golden Gate Capital's 80% interest in Romano's Macaroni Grill (RMG) for $55 million. According to an article in Nation's Restaurant News, Brinker International's (EAT) 20% stake was also part of the transaction. In this article, I will analyze some of the risks and rewards of the acquisition for IRG shareholders.

Background

RMG is a 25-year-old restaurant chain with 210 units in 39 states. Brinker International acquired the chain in 1989. Golden Gate Capital acquired 80% of the chain from EAT in 2008. Golden Gate initially offered $131 million for its 80% stake, but that price was later reduced to $88 million as the...

Only subscribers can access this article, which is part of the PRO research library covering 3,770 different stocks.
Growing numbers of fund managers and other investment professionals subscribe to Seeking Alpha PRO for equity research that is unavailable elsewhere, so they can: