News

Cava Group acquiring Zoe's Kitchen with help from Ron Shaich

August 17, 2018

CavaGroup, which has 66 units, is acquiring Zoes Kitchen and its 261 locations. The combined companies will have 327 restaurants in 24 states throughout the U.S., according to a company press release.

Under the terms of the agreement, Zoes Kitchen shareholders will receive $12.75 in cash for each share of common stock they hold. This represents a premium of approximately 33 percent to Zoes Kitchen's closing share price on Aug. 16, 2018, and a premium of approximately 33 percent to Zoes Kitchen 30-day volume weighted average price ended on Aug. 16, 2018, and an enterprise value of approximately $300 million.

The acquisition will be financed through a significant equity investment in Cava led by Act III Holdings, the investment vehicle created by Ron Shaich, founder, chairman, and former CEO of Panera Bread, and funds advised by The Invus Group, with participation from existing investors SWaN & Legend Venture Partners and Revolution Growth.

After closing, Brett Schulman, CEO of Cava will serve as CEO of the combined company and will work closely with the existing leadership teams at Zoes Kitchen and Cavato to oversee their growth and evolution. Ron Shaich will serve as chairman of the combined company.

"Zoes board of directors and Management are pleased to announce today's transaction," Kevin Miles, Zoes Kitchen CEO, said in the release. "Our mission was to deliver the highest value obtainable for our shareholders and pursuant to the transaction announced today our shareholders will be receiving a substantial premium to the company's unaffected stock price."

"Together, these two brands are united by a shared heritage and passion for exceptional Mediterranean cuisine," Schulman said. "Now with the addition of Zoes Kitchen, we will be able to broaden our geographic footprint and meet the needs of even more guests — whether in Bethesda or Birmingham, Plano or Pasadena — who crave delicious, healthy food without compromise. As part of the Cava family, Zoes Kitchen will benefit from CAVA's track record of bold culinary innovation and leveraging data and technology to drive growth and convenience."

The company's board has determined that the merger agreement with Cava is fair to and in the best interests of the company and the holders of the company's common stock.

Zoes Kitchen also announced that it will not hold its previously scheduled second quarter 2018 earnings conference call and web simulcast today and will not issue a press release with second quarter 2018 financial results. The company expects to file its quarterly report with second quarter 2018 financial results on or before Aug. 20, 2018.