David Hunsinger for The New York Times The P. F. Chang’s China Bistro menu includes lemon scallops.
12:09 p.m. | Updated
P.F. Chang’s China Bistro, the Asian-themed restaurant operator, has agreed to go private in a deal valued at $1.1 billion.
Under the terms of the transaction announced on Tuesday, Centerbridge Partners, the private equity firm, will pay P.F. Chang’s shareholders $51.50 a share in cash, 29.8 percent above the closing price on Monday. P.F. Chang’s also has the option to shop itself to other buyers during the next 30 days to find a superior bid.
Founded about two decades ago in Scottsdale, Ariz., by Paul Fleming and the chef Philip Chiang, P.F. Chang’s was designed to offer affordable oriental cuisine with a Western flair, with dishes like “Philip’s Better Lemon Chicken” and “Dynamite Shrimp.” It manages two restaurant brands: its namesake line, a Chinese-inspired restaurant chain, and Pei Wei’s Asian Diner, a more casual pan-Asian chain.
P.F. Chang’s China Bistro restaurants features a gluten-free menu and an extensive wine list. It it fully owns its restaurants in the United States, it also sells licensing agreements abroad, with franchises in Kuwait City and Dubai.
While P.F. Chang’s is a well-known domestic brand with hundreds of locations in the United States, it has straining to shore up sales and foot traffic. In the first quarter, revenue rose slightly, to $318.9 million, from the period a year earlier, while its profit narrowed to $6.3 million. Sales at stores open more than a year fell 0.6 percent at P.F. Chang’s China Bistro and dropped 1.7 percent at Pei Wei’s for the first quarter.
David Hunsinger for The New York Times A P.F. Chang’s in Princeton, N.J.
“We are confident that being a private company will provide us with greater flexibility to focus on our long-term strategic plan of elevating our guest experience, enhancing our value proposition, growing traffic and improving the performance of our brands,” Richard L. Federico, the chief executive of P.F. Chang’s, said in a statement.
The deal would be the largest leveraged buyout of a restaurant chain since the $4.2 billion buyout of Burger King Holdings in September 2010, according to S&P Capital IQ. It is expected to close by the end of the third quarter.
The transaction comes as other casual dining chains struggle to turn around their operations under private equity ownership. Friendly Ice Cream, owner of Friendly’s, was acquired by Sun Capital Partners for $337.2 million five years ago. In 2011, it shuttered dozens of restaurants and filed for bankruptcy protection, emerging earlier this year.
In December, a judge approved the sale of Friendly’s to a affiliate for $75 million. The Pension Benefit Guaranty Corporation, an independent federal agency, accused the private equity firm of orchestrating the series of transactions to avoid paying pension benefits to thousands of workers and retirees.
