Shares in Zoës Kitchen Inc (NYSE:ZOES) vaulted sharply higher in morning trade after the restaurant company reached an agreement to be bought out by the private Cava Group in a deal with an enterprise value of as much as US$300mln.
Under the tie-up’s terms, Zoës Kitchen shareholders will receive US$12.75 in cash for each share owned, which is equal to a 33% premium to Zoës Kitchen’s closing share price on Thursday of $9.56.
Pleased by the announcement, investors sent Zoës' shares up by 33% to US$12.74 shortly after the opening bell.
Cava Group and Zoës Kitchen, which is based in Plano, Texas, are a suitable match as both run Mediterranean-inspired restaurants. Together, the combined company will own 327 restaurants across twenty-four states.
Cava’s acquisition will be financed via a significant equity investment led by the investment vehicle ACT III Holdings, which was started by Ron Shaich, the founder of Panera Bread, along with existing investors Swan and Legend Venture Partners and Revolution Growth.
Cava CEO Brett Schulman will take the helm of the combined group as CEO while Shaich will serve as chairman.
Cava will pay a US$17mln termination fee if the merger fails to occur.