In a deal with an estimated value of $28.7 million, multiconcept operator Luby’s will sell its Luby's Cafeteria restaurant business to a newly formed affiliate of Calvin Gin. This marks the second concept Luby’s has sold in as many weeks. On June 18, Luby’s reached an agreement to sell its Fuddruckers chain to one of its largest franchisees.
These sales are part of Luby’s previously announced plan to sell its assets, pay its liabilities, and return the remaining cash to shareholders. Luby’s shareholders approved this plan in the fall of 2020.
The most recent of the two deals includes 32 existing Luby’s restaurants, all in Texas, and ownership of the Luby’s Cafeteria brand. The acquisition of the Luby’s Cafeteria business does not include any of the real estate owned by Luby’s, nor does it include any of the company's Fuddruckers operations or the company’s culinary contract service business. The structure of the transaction will allow Luby’s to sell its real estate related to its cafeteria restaurant business to third parties and realize the related value for its shareholders, per a release announcing the deal.
Following the closing of the transaction, Luby’s anticipates that almost all employees at the 32 involved locations will be offered positions by the purchaser to remain at those stores, employment that will likely total more than 1,000 associates. In addition, many members of the Luby’s management team are expected to remain with the chain.
It is currently anticipated that the Luby’s Cafeteria operations sale transaction could provide Luby’s with approximately $28.7 million of value, and all but a nominal amount will be derived from the purchaser's assumption of Luby’s liabilities and the purchaser’s issuance of notes to Luby’s, per a release.
Once the deal is complete, the Gin affiliate is expected to rename itself Luby’s Restaurants Corporation.