The Work

May 25, 2011 5:45 PM

Kirkland, Latham, Richards Layton Advise as Private Equity Shop Gobbles Up Pizza Chain

Posted by Dana Olsen

San Francisco-based private equity firm Golden Gate Capital is staying in state for its latest acquisition, announcing Wednesday that it is buying Los Angeles–based restaurant chain California Pizza Kitchen for $470 million, according to a joint press release issued by the two companies.

As Bloomberg notes, the deal--under which the chain's board of directors agreed to accept Golden Gate Capital's tender offer of $18.50 per share--comes more than a year after California Pizza Kitchen first began looking for a buyer. At the outset of the process, the board contacted 30 potential buyers, with four ultimately submitting bids. Golden Gate Capital first showed interest in acquiring the company in September 2010, and, as The New York Times reports, has raised its offer multiple times since then.  

The all-cash transaction is expected to close in the third quarter of this year, after a Golden Gate Capital affiliate submits tender offers to all of California Pizza Kitchen's shareholders. Once the acquisition is finalized, Golden Gate Capital will own 205 of California Pizza Kitchen's 265 restaurants. The remaining 60 are privately-owned franchises.

California Pizza Kitchen had twofold legal representation for the transaction. California Pizza Kitchen, Inc., was represented by Los Angeles–based Latham & Watkins mergers and acquisitions partners Paul Tosetti, Jason Silvera, and Bradley Helms; as well as corporate and securities partner Scott Hodgkins. A special committee of the company's board turned to corporate partners Donald Bussard, Mark Gentile, and Raymond DiCamillo of Richards, Layton & Finger for advice.

Golden Gate Capital was represented by Kirkland & Ellis, which has advised the private equity firm in the past. The Kirkland team on the transaction was led by corporate partners David Breach and Daniel Wolf, and financing partners Jay Ptashek and David Nemecek. Corporate partners Mikaal Shoaib and Marc Browning; benefits and compensation partners Dean Bachus and Robert Zitko; tax partner David Kung, real estate partner John Caruso, intellectual property partner John Lynn, environmental partner Brian Land, and labor partner Tim Stephenson also worked on the deal.

California Pizza Kitchen, which built its reputation on unusual offerings like barbecue chicken pizza, was founded by former federal prosecutors Rick Rosenfield and Larry Flax in 1985. In the 26 years since, the casual-dining chain has opened restaurants in 12 countries and 32 states. 

California Pizza Kitchen is the third restaurant holding in Golden Gate Capital's investment portfolio. The company also owns the On the Border Mexican Grill and Romano’s Macaroni Grill chains. The Wall Street Journal notes that chain restaurants are increasingly attracting the interest of private equity investors. Wendy's/Arby's Group and A&W All-American Food are among the chains currently up for sale, and 3G Capital bought Burger King Holdings, Inc. for $3.3 billion last year.

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