August 17, 2018 / 11:50 AM / 8 months ago

CAVA to acquire Zoe's Kitchen for $300 million -sources

Aug 17 (Reuters) - CAVA, a U.S. privately held restaurant chain focusing on casual Mediterranean cuisine, has agreed to acquire publicly listed peer Zoe’s Kitchen Inc for around $300 million including debt, with backing from a group of investors, people familiar with the matter said on Friday.

The deal will expand CAVA’s footprint to 327 U.S. locations from 66. It makes Zoe’s the latest restaurant operator to sell itself amid increasing competition among casual chains, which has pressured the sector to consolidate to boost profit margins.

CAVA will pay $12.75 per share for Zoe’s, a 33 percent premium to Thursday’s closing price, the sources said.

The group of investors offering financing to CAVA for the acquisition includes an investment firm led by Panera Bread founder and chairman Ron Shaich, they said.

Shaich will serve as chairman of the combined company, while Cava Chief Executive Brett Schulman will be CEO, the sources added, asking not to be identified ahead of an official announcement later on Friday.

Under the terms of the deal, Zoe’s Kitchen will have a 35-day ‘go-shop’ period to seek a better acquisition offer, the sources said.

CAVA and Zoe’s Kitchen did not immediately respond to requests for comment.

CAVA was started in Rockville, Maryland by three Greek-American friends, Ike Grigoropoulos, chef Dimitri Moshovitis, and Ted Xenohristos. Zoe’s was founded in 1995 and has 261 locations in 20 U.S. states. (Reporting by Greg Roumeliotis in New York)

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