Real Mex Restaurants Inc. has a new owner and is expected to emerge from bankruptcy soon.
A Delaware bankruptcy court judge on Friday approved the sale of the parent company to the El Torito, Acapulco and Chevys Fresh Mex chains to a group of noteholders that includes Tennenbaum Capital Partners, Z Capital Partners and J.P. Morgan Investment Management, under the entity RM Opco LLC.
The bid was worth about $129 million, including $49 million in cash and an $80 million credit bid, along with assumption of certain liabilities, according to court documents. Under terms of the deal, RM Opco was expected to hold an 85-percent stake in Real Mex once the deal is closed.
Majority owner Sun Capital Partners initially acquired a controlling interest in Real Mex in 2006 in a $359 million deal. Later, Sun Capital relinquished control for several years after a debt-for-equity swap, only to take control again in 2010.
Real Mex filed for Chapter 11 restructuring in October, which it attributed to the company’s high debt load, certain above-market rents and a weak economy, particularly in California, where most of the company’s restaurants are located.
The RM Opco bid was approved by Real Mex’s board earlier last week, and the company said at the time that the sale would likely close within 30 days of court approval, allowing the company to exit Chapter 11 with a substantially improved balance sheet, a more profitable store base and a lower cost structure.
Real Mex operates about 141 restaurants under the El Torito, Acapulco and Chevys brands, as well as single-units Sinigual and Las Brisas, and the small regional concepts Who-Song & Larry’s, Casa Gallardo and El Paso Cantina. The Chevys chain also includes about 20 franchised locations.
The sale also included Real Mex Foods, a production facility and foodservice distributor.