Private equity group to buy Back Yard Burgers

by Eric Schroeder
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MEMPHIS, TENN. — BBAC, L.L.C., an Atlanta-based investor group, and its wholly-owned subsidiary BBAC Merger Sub, Inc., agreed to acquire fast-food chain operator Back Yard Burgers Inc. for approximately $33.3 million in cash. Including assumed debt, the total value of the transaction is $38 million.

As part of the transaction, BBAC would pay $6.50 per share, representing about a 29% premium to Back Yard Burger’s closing price of $5.05 on June 8.

BBAC L.L.C. is managed by Cherokee Advisors L.L.C., with principal investors including Stephen Lynn, former chairman and chief executive of Shoney’s Inc. and Sonic Corp.; Pharos Capital Group L.L.C. and Reid Zeising of Cherokee Advisors.

Back Yard Burgers’ board unanimously approved the acquisition, and officers and directors owning approximately 26.74% of the company’s outstanding stock have agreed to vote their shares in favor of the transaction.

The transaction is expected to close in the third quarter, subject to shareholder approval and a financing contingency by BBAC.

Back Yard Burgers operates and franchises quick-service restaurants in 20 states, primarily in markets throughout the Southeast. The company reported 2006 profit of $900,000 on revenue of $44.7 million.

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