Patina to buy Smith & Wollensky eateries
Chef Joachim Splichal and his Patina collection of restaurants are picking up a steak knife to carve into new markets.
Patina Restaurant Group, which owns some of Southern California’s premier eateries and New York’s Rockefeller Center ice rink, said Monday that it had agreed to buy the Smith & Wollensky Restaurant Group Inc. steakhouse chain for $79.5 million.
“This is the first acquisition, from a restaurant standpoint, to expand the Patina group,” Splichal said. “Our strategy is to expand the brand and look at different markets.”
In October, Splichal formed the company with business partner Nick Valenti and Japanese investor Shidax Corp. They paid $90 million to British food service company Compass Group for 34 restaurants, including the food empire that Splichal began building in 1989.
Patina operates mostly in Southern California and Manhattan, with a handful of restaurants in New Jersey, Las Vegas and Northern California.
The acquisition of Smith & Wollensky, a national chain of 13 steakhouses founded 30 years ago, increases Patina’s presence in existing locations and expands its reach into major markets such as Chicago, Houston and South Florida. Valenti said Patina might open a Smith & Wollensky restaurant in L.A. The closest one now is in Las Vegas.
“Los Angeles is not without some very fine steakhouses,” said Valenti, whose group owns the Nick and Stef’s Steakhouse in downtown Los Angeles. “We think there’s room for at least one more.”
Under the acquisition agreement, New York-based Patina will replace Smith & Wollensky founder and Chief Executive Alan N. Stillman and manage the chain as a group brand.
Stillman’s press office didn’t return calls seeking comment, but he has agreed to vote his 18% stake in Smith & Wollensky in favor of the acquisition. Stillman will receive some assets involved in the proposed deal, including restaurants in New York.
Stillman in a statement said that the transaction was in the best interests of shareholders because the $9.25-a-share offer was “significantly higher than the trading price for our common stock for the last several years.” The Patina offer trumps a bid last month by Landry’s Restaurant Inc. for $7.50 a share.
Smith & Wollensky’s shares rose 70 cents, or 8.5%, to $8.90 on Monday. The company has struggled with losses since it went public in 2001, although it was in the black for two of the last three quarters.
The deal is another example of public restaurant companies going private, the latest case being Outback Steakhouse’s private-equity buyout in January, said Dennis Lombardi, executive vice president for foodservice strategies at consulting firm WD Partners.
He said restaurant companies were having a difficult time coping with Wall Street’s quarter-to-quarter demands and expenses related to corporate disclosure requirements. Smith & Wollensky would help Patina grow its volume and secure better rates from food suppliers, Lombardi said.