Magic Brands LLC and Fuddruckers Inc. have obtained bankruptcy court approval for the sale of a substantial amount of its assets to Luby's Inc.
“The approval of the sale of Fuddruckers to Luby's affirms our belief and confidence in the strength of the Fuddruckers brand and operations,” said Magic Brands CEO Peter Large. “The management team and advisors, along with the Official Unsecured Creditors' Committee, worked tirelessly to obtain the highest and best value for the brands and we have done just that with the sale to Luby's.”
The transaction is expected to close by July 26, 2010, subject to the satisfaction or waiver of other customary closing conditions.
Luby's won the right to purchase Magic Brands in an auction June 17, and their affiliates for $63.45 million. The Houston-based cafeteria chain will assume some of Fuddruckers' obligations, real estate leases and contracts. It also will pay $2.45 million more in cash if it doesn't assume some contracts.
Magic brands announced in April a tentative $40 million deal with Tavistock Group for the acquisition of approximately 62 Fuddruckers locations and its Koo Koo Roo concept. Tavistock is the same private-equity firm that purchased FREEBIRDS World Burrito in 2007.
Tavistock was active in Thursday's 11-hour bid process, said its chief marketing officer Jeff Carl. And as other parties dropped out, the final two bidders were Tavistock and Luby's.
Fuddruckers operates 60 restaurants and three Koo Koo Roo locations, while franchisees operate 138 more Fuddruckers locations.
