Granite City Signs Letter Of Intent To Fund Growth
Granite City Food & Brewery Ltd. (NASDAQ:GCFB) today announced that it has entered into a letter of intent with Concept Development Partners, LLC (“CDP”) to provide equity financing and facilitate debt financing. DHW Leasing, L.L.C. (“DHWL”) the Company’s major shareholder, is also a party to the letter of intent.
The LOI provides that CDP will purchase $9.0 million of newly issued convertible preferred stock of the Company and will arrange for a new $10.0 million debt financing for the Company. In addition to providing capital for the company’s growth, the financing will fund the repurchase of 3.0 million shares of outstanding common stock of the company held by DHWL and will result in a change of control of the company. As a part of the transaction, an affiliate of DHWL, Dunham Capital Management, L.L.C., has agreed to reduce fixed rents on certain properties leased to the company by an aggregate of $300,000 per year. Additionally, proceeds from the transaction will also be used to purchase the potential restaurant pad site owned by Dunham in Troy, Michigan.
Concept Development Partners is a partnership formed by Dallas-based private equity firm CIC Partners and Robert Doran, of CDP Management Partners, LLC. Mr. Doran, a 35-year restaurant industry veteran and former Executive Vice President of McDonald’s, will assume the role of CEO of Granite City at the transaction’s closing. Steven Wagenheim, the Company’s existing CEO, will assume the title of President and Founder. Dean Oakey, Doran’s partner at CDP Management Partners, LLC, will become Chief Concept Officer of Granite City. In addition, Mike Rawlings, CEO of Legends Hospitality and former President of Pizza Hut, and Louis Mucci, former CFO of BJ’s Restaurant and Brewhouse and Chairman of PriceWaterhouseCoopers National Restaurant practice, will join the Granite City Board of Directors. Fouad Bashour, Partner with CIC Partners, will become Chairman of the Board. All of these changes will be made upon the transaction’s successful closing.
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