CHARLOTTE, NC – International restaurant franchisee Chanticleer Holdings Inc. is making a big deal for Little Big Burger (LBB), a chain of gourmet fast-casual restaurants based in Oregon. Chanticleer plans to launch a $10 million rights offering to its shareholders. The proceeds will be used to close its acquisition of Little Big Burger.
The rights offering will be made through a dividend in the form of non-transferable subscription rights to purchase one share of common stock per each share of common stock owned at an exercise price based on an 8 percent up to 12 percent discount to market.
“With significant brand recognition in the regional market and a loyal customer base, LBB recorded $6 million in net sales in 2014 and their unit economic model with EBITDA margin greater than 25 percent will be accretive to Chanticleer’s earnings,” Chairman and CEO Mike Pruitt said. “In addition to our US expansion strategy, our rights offering would provide the capital to execute on increasing our interest in Hooters Australia from 60 percent to 80 percent to take greater control of a business which can generate increased returns. Proceeds will also support our purchase of other restaurant properties and assets both in the US and abroad.”
Chanticleer signed a definitive agreement to acquire LBB in July, although terms of the deal have not been disclosed. LBB generated $6 million in revenue in 2014.
Chanticleer and its subsidiaries own and operate several restaurant brands in the United States and abroad. The company is a franchisee owner of Hooters restaurants in the US and Australia, South Africa and Europe. Chanticleer also owns and operates American Burger Co., BGR: The Burger Joint, BT’s Burger Joint in addition to a majority stake in Just Fresh restaurants in the US.
“We have dramatically evolved and expanded our business and created a scalable growth platform driven by diverse revenue streams from our established and emerging restaurant brands,” Pruitt said. “Over the past year we have doubled the number of our branded restaurants worldwide to 47 through a combination of new store openings and acquisitions. Furthermore, the franchising strategy which we launched with our acquisition of BGR is progressing well and we are executing on our strategy to convert the 80-plus BGR franchise locations that are under development agreement.”