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Local News

Bojangles' Announces Deal To Sell To Investment Firms

bojangles_0.jpg
Michael Rivera
/
Wikimedia Commons
A Bojangles in Daleville, Alabama

Bojangles' will be acquired by two New York firms.  The fast food chain founded in Charlotte in 1977 said Tuesday it has agreed to be acquired by investment firms Durational Capital Management and The Jordan Company for $16.10 per share. 

That cash deal represents a 15 percent premium to the closing share price of September 27, a day before Bojangles' said it was exploring "strategic alternatives."  

Bojangles said in a statement the company will continue to be operated as an independent, privately-held company and will remain based in Charlotte.

The fast-food chain known for its chicken and biscuits has experienced challenges since going public in 2015, including a 71 percent drop in profits this latest quarter.  In March, its CEO stepped down.   Also this year, the company closed 10 locations.  None was in North or South Carolina, which is considered Bojangles' core market.

Michael Gallo, a senior research analyst who follows Bojangles' for investment bank C.L King & Associates, says more store closures outside the Carolinas are likely with the change in ownership.

“Those stores in many of those markets have underperformed for some time,” Gallo said.  “We would not be surprised to see additional store closures particularly in adjacent markets as a new owner takes a fresh look at it.”

Gallo said the turnaround that will likely be required for Bojangles' is generally easier to accomplish in a private setting, rather than a public one.

Bojangles' Director William Kussell released the following statement as part of Tuesday’s announcement:

“In consultation with our outside advisors, the Board of Directors has been evaluating several strategic alternatives over the last several months. We are confident that this agreement offers a promising opportunity to realize the highest value for our stockholders while providing a strong path forward for the Bojangles'® brand, its employees, franchisees, and loyal customers.”

The transaction is expected to be completed in the first quarter of fiscal year 2019.  Bojangles' has 758 locations in 11 states and Washington D.C.