Mill Road Capital to acquire Rubio's Restaurants

by Eric Schroeder
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GREENWICH, CONN. — Mill Road Capital, L.P., a private investment firm focused on publicly-traded companies under $250 million in size, has agreed to acquire Rubio’s Restaurants, Inc., Carlsbad, Calif., for $8.70 per share, or approximately $91 million. Credited with introducing fish tacos in Southern California, Rubio’s operates, licenses or franchises more than 195 Rubio’s Fresh Mexican Grill restaurants in California, Arizona, Colorado, Utah and Nevada.

“After careful consideration of a full range of strategic alternatives, we are pleased to have reached this agreement with Mill Road Capital, which creates substantial value for our stockholders,” said Loren Pannier, chairman of the special committee of Rubio’s board of directors. “This transaction represents a premium of 14% over the closing share price of Rubio’s common stock on May 7, 2010, of $7.66, a premium of approximately 17% over the closing price of $7.41 on Oct. 29, 2009, the last trading day before we announced that we were exploring strategic alternatives, and a premium of approximately 45% over the closing price of $6 on Oct. 14, 2009, the last trading day prior to the announcement of an unsolicited indication of interest by Alex Meruelo, his affiliates and Levine Leichtman Capital Partners IV, L.P. to acquire Rubio’s.”

The transaction is expected to close in the third quarter of 2010.

In the first quarter ended March 28, Rubio’s posted net income of $367,000, equal to 4c per share on the common stock, up 50% from $245,000, or 2c per share, in the first quarter of fiscal 2009. Net sales rose narrowly to $46,708,000 from $46,308,000.
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