HOUSTON, Sept. 11 /PRNewswire-FirstCall/ -- Landry's Restaurants, Inc.
(NYSE: LNY) announced today that it has entered into a definitive agreement to
acquire the 27 unit Texas-based Saltgrass Steak House and Seafood restaurants
from MetroNational Corporation for $75 million. The acquisition is expected
to close within 30 days.
MetroNational, a privately held real estate investment, development and
management company headquartered in Houston, Texas, is active in commercial,
healthcare, land development, retail, hospitality and residential projects,
and is the owner/developer of such premier projects as Memorial City and
Memorial City Mall, Memorial-Hermann-Memorial City Hospital, Spring Showdows,
Stablegate, Centerfield, Pine Crest Golf and Baseball USA. In 1995,
MetroNational became the financial partner of Saltgrass which allowed for its
According to Tilman J. Fertitta, Landry's Restaurants, Inc. Chairman,
President and CEO, "We believe that the Saltgrass Steak House concept has the
potential to perhaps be the best strategic acquisition since we purchased the
original Joe's Crab Shack restaurant in 1994. That is how confident and
excited we are with this transaction. The Saltgrass Steak House restaurants
are well known for their fun atmosphere and quality steaks. Since they are
based in our home market, we have closely watched their successful expansion
in the key Texas markets. The high unit volumes and casual energetic concept
works well in proximity to our Joe's Crab Shack restaurants. In fact, four of
the Saltgrass locations are closely situated to our Joe's Crab Shacks. The
steak concept complements Landry's existing portfolio and offers potential
future development of Joe's Crab Shacks and Saltgrass Steak Houses at mutual
Mr. Fertitta further noted that the popularity of steakhouses remains
strong. Of the 50 top growth chains, 13 of them, including Saltgrass Steak
House, specialize in beef, with check averages ranging from $8.99 to over $70.
Saltgrass restaurants' check average is approximately $19.
The Saltgrass Steak House restaurant chain has become well known in Texas
for its fun, casual decor, excellent steaks and seafood, and it's friendly,
attentive service. Saltgrass Steak House has also garnered the attention of
the restaurant industry, rising to inclusion among Restaurant Hospitality's
50 fastest growing full service restaurant chains in America, and inclusion in
the top 10 highest average unit sales volumes.
"The quality of the Saltgrass Steak House operations exceeds in every
measurable category," said Richard Ervin, Executive Vice President of
Operations. "Those managing the Saltgrass business have truly excelled and
developed an outstanding reputation for quality and consistency. We look
forward to participating in their ongoing success, and together growing and
expanding the concept."
Mr. Wayne Hays, Chief Operating Officer for MetroNational expressed his
support of the transaction as well. "Saltgrass Steak House is one of the best
performing steakhouse concepts in the country," he said. "Under
MetroNational's ownership, we have grown the Company to 27 successful high
volume restaurants throughout Texas. Now it is time to transition ownership
from a financial to a strategic owner. Landry's, under the leadership of
Tilman Fertitta, is the right company to take the Saltgrass concept forward to
become a national chain."
In the purchase, Landry's will acquire all of the outstanding common stock
of Saltgrass and certain real estate. Landry's expects the Saltgrass
restaurants to add approximately $100 million of annual sales and $13 million
in annual cash flow, after corporate general and administrative overhead, but
before financing costs and taxes. In addition, Landry's expects the
acquisition to be accretive to the Company's 2003 earnings by up to $.08 per
The acquisition of Saltgrass Steak House restaurants is Landry 's third
acquisition this year. In February, Landry's bought the Detroit based 16-unit
Charley's Crab seafood chain, and in July, Landry's purchased the 35-unit
Chart House seafood chain with their spectacular waterfront locations on the
east and west coasts. With the closing of these acquisitions, the Company's
revenues for 2003 are expected to be approximately $1.1 billion.
Landry's Restaurants, Inc., is the nation's second largest casual dining,
full-service seafood restaurant chain. With the addition of Saltgrass, the
Company will own and operate approximately 275 restaurants, including Landry's
Seafood House, Joe's Crab Shack, The Crab House, Rainforest Cafe, Charley's
Crab, and The Chart House, as well as the Kemah Boardwalk, a magnificent
30-acre, family-oriented themed entertainment dining destination. The Company
employs 27,000 workers in 34 states.
This news release may contain forward-looking statements. Actual events
or Landry's results may differ materially from their results discussed in the
forward-looking statements. Landry's does not expect to update forward-
looking statements continually as conditions change.
SOURCE Landry's Restaurants, Inc.