Granite City to buy 7 Cadillac Ranch units for $9M
Granite City Food & Brewery Ltd., the Minneapolis-based operator of 26 namesake casual-dining restaurants, has agreed to acquire the assets of seven Cadillac Ranch All American Bar & Grill restaurants for $9 million.
As part of the deal, Granite City has closed on the purchase of one of the locations, at the Mall of America in Bloomington, Minn., for a price of $1.4 million. The remaining Cadillac Ranch units in the deal include one restaurant in operation and another under construction in Indianapolis; locations in Pittsburgh and Miami; and units in Oxon Hill, Md., and Hallandale Beach, Fla.
Restaurateurs Clint Field and Eric Schilder own the restaurants to be acquired by Granite City, and Restaurant Entertainment Group manages the operations.
Granite City also has an option to buy the assets of another Cadillac Ranch location in Annapolis, Md.
“As we have discussed from the day of our initial investment in Granite City Food & Brewery, one of our goals has been to use the Granite City engine as a platform to grow into a broader and more dynamic restaurant company,” said chief executive Rob Doran. “Cadillac Ranch’s distinctive characteristics and unique melding of entertainment and casual dining excite us.”
Doran, a former executive vice president with McDonald’s USA, joined Granite City as chief executive and a board member May 10, when the company received a $9 million equity infusion from Concept Development Partners, in partnership with Dallas-based private-equity firm CIC Partners. Other CIC associates who joined the board of Granite City at that time included Mike Rawlings, former president of Pizza Hut; Lou Mucci, former chief financial officer of BJ’s Restaurants; Michael Staenberg, president of THF Realty; and Fouad Bashour, founding partner of CIC.
That preferred-stock transaction coincided with a $10 million round of financing from Fifth Third Bank.
Dean Oakey, chief concept officer for Granite City, said the company likely would incorporate some aspects of Cadillac Ranch’s food and beer offerings into its namesake chain. Other synergies would include back-end support from the Granite City corporate office to store-level management at the acquired Cadillac Ranch units, he said.
Last month, Granite City announced that it would remodel eight locations to include more seating capacity to reduce wait times and bolster private-party business. The upgrades are scheduled to be completed by next October, while two locations apiece in Minnesota and Iowa would complete their remodels by this holiday season, the company said.
Granite City, which reports third-quarter earnings Tuesday, recently has had mixed financial results, increasing restaurant revenues and guest counts in each of the past four quarters but recording net losses due to added interest expense from its structured debt.
In the company’s June 28-ended second quarter, revenues rose 3.5 percent to $24 million, reflecting a same-store guest count increase of 4.1 percent. However, the company recorded a net loss of $424,965, which included net interest expense of more than $833,000.
Granite City, which president Steve Wagenheim founded in 1999, operates in 11 states.