DALLAS – TGI Fridays is planning to go public. The casual dining chain announced a definitive agreement to merge with Allegro Merger Corp., a blank-check special purpose acquisition company, early next year in a transaction valued at $380 million.
TGIF Holdings, LLC shareholders will receive approximately $30 million in cash and stock upon completion of the transaction, and Allegro will assume approximately $350 million of net debt. TriArtisan Capital Advisors LLC, the majority owner of TGI Fridays, will exchange most of its ownership for shares of Allegro, the companies said.
“Allegro’s board and I believe that Fridays is an unparalleled iconic international brand, and we are excited to be able to bring this opportunity to our shareholders,” said Eric Rosenfeld, CEO at Allegro Merger Corp. “Fridays’ highly predictable stream of franchise and licensing revenue is very attractive, and we believe that Fridays provides a compelling value to our shareholders.”
The merger is subject to approval by Allegro shareholders. It is expected to close in the first quarter of 2020.
TGI Fridays has 396 domestic units and 442 international units in more than 55 countries. Systemwide sales were approximately $2 billion last year, with an average unit volume of $2.7 million.
The company made several leadership changes throughout the past year. Ray Blanchette became CEO in October 2018. He was joined by John Neitzel, president and chief operating officer for franchise locations. Jim Mazany, chief operating officer for company stores, joined the team in June.
“The first order of business when I took over this company was to bring in the best talent to improve operations and innovation,” Blanchette said. “This transaction is the next significant strategic move and will allow us to gain public company status and access incremental equity capital to accelerate the rejuvenation of this iconic global brand.”