Back in the glory days of the late 1990s and early 2000s, P.F. Chang's was a fresh concept with fresh food. Under it's most recent private equity owners it wasn't fresh by any stretch. Success is no further than paying a bit more for better ingredients and staff.
— Jason Clampet
Chinese restaurant chain P.F. Chang’s China Bistro Inc., burdened with a heavy debt load and fierce industry competition, entered an agreement to be sold to TriArtisan Capital Partners LLC and Paulson & Co. Inc., according to a private notice sent to investors and seen by Bloomberg News.
Bloomberg reported Monday that the company was near a sale for about $700 million from owner, private equity firm Centerbridge Partners LP. The deal, subject to customary closing conditions, is expected to close in the first quarter of 2019, according to the statement.
As part of the transaction, all of the company’s more than $675 million of total debt will be taken out at par, according to the statement. Pei Wei Asian Diner, a separate restaurant chain that had been operated by the parent company and which was recently split off, is staying with Centerbridge Partners.
P.F. Chang’s liabilities include about $375 million of secured debt including $5 million of capital leases, a $317 million first-lien term loan, $25 million of revolver borrowings and $28 million of secured notes provided by the sponsor. Its borrowings also include $300 million of unsecured bonds, according to people with knowledge of the matter, who asked not to be identified discussing a private matter.
Notice of the sale agreement sent the company’s bonds higher, with the senior unsecured bonds due 2020 climbing more than 4 cents on the dollar, according to Trace bond trading data.
A representative for Centerbridge said the firm declined to comment until the close of the sale. Representatives for P.F. Chang’s, TriArtisan and Paulson didn’t immediately return requests for comment on the sale agreement.
P.F. Chang’s operates 214 locations in the U.S. and franchises another 93 restaurants in 24 countries around the world. Centerbridge bought the company and took it private in 2012, which was valued at $1.1 billion, Bloomberg reported at the time.
Bank of America Merrill Lynch acted as lead financial adviser to P.F. Chang’s. Barclays also acted as financial adviser to the company.
–With assistance from Kiel Porter.
©2019 Bloomberg L.P.