Ignite Restaurant Group Acquires Romano’s Macaroni Grill

  Ignite Restaurant Group Acquires Romano’s Macaroni Grill

- Third Polished Casual Concept Joins Joe’s Crab Shack and Brick House Tavern
                                + Tap Brands -

Business Wire

HOUSTON -- February 6, 2013

Ignite Restaurant Group (Nasdaq: IRG) today announced that it has agreed to
acquire Romano’s Macaroni Grill (“Macaroni Grill”) for approximately $55.0
million in an all-cash transaction from private equity firm Golden Gate
Capital, management and investors. The acquisition will be funded through a
$50 million upsizing of the Company’s existing credit facility. The Company
plans to close the acquisition late in the second quarter of 2013 and expects
the transaction to be accretive to earnings in 2014.

Romano’s Macaroni Grill, which opened its first restaurant in 1988, currently
owns and operates 186 units and franchises five units across 36 states.
Additionally, the brand franchises an additional 19 units throughout nine U.S.
territories and foreign countries. For the twelve month period ending December
31, 2012, Romano’s Macaroni Grill generated approximately $385 million in
revenues. Average unit volumes are approximately $2.1 million.

Blending 20 years of tradition with innovative Italian cooking, Macaroni Grill
provides a rich dining experience matched with an authentic Italian menu. From
bronze-cut Italian pastas with seasonal ingredients to grilled steak, seafood,
hand stretched pizzas and flatbreads, and decadent desserts; a visit to
Macaroni Grill is truly an affordable indulgence. The high quality authentic
Italian ingredients, honor system house wine and opera singers showcase the
restaurant's heritage, while the open kitchen, brick ovens and festive
atmosphere bring energy to every meal. In addition to their restaurants, the
brand also features a line of packaged food products based on dishes offered
by the restaurant.

Ray Blanchette, President and Chief Executive Officer of Ignite Restaurant
Group, stated, “As a pioneer in the polished casual segment and with a similar
operating format to our existing brands, Macaroni Grill is an ideal complement
to the Ignite family of brands. We intend to leverage the unique atmosphere
and enhance the high quality menu that has been a hallmark of Macaroni Grill
since its inception. We believe that our operations, brand management and real
estate portfolio strengths provide tangible opportunities to elevate the brand
experience and drive shareholder value. We have a history of driving operating
improvements at Joe’s Crab Shack and we believe we have identified significant
opportunities and synergies that we will leverage over the next twelve months
and beyond. We are excited that this acquisition will transform Ignite into a
company with three high quality casual dining brands, almost one billion in
revenues, and significant earnings growth potential over time.”

Josh Olshansky, Managing Director of Golden Gate Capital, added, “We are
pleased with the outcome of our successful investment in Macaroni Grill and
believe the Company is well positioned for the future. Ignite is a great
strategic partner to help take Macaroni Grill to its next phase of growth.”

2013 Combined Store Count and Revenue Projections

Unit Count

                                                                      Project
                                                          Planned     unit
                                           Acquired in    2013        count
                        Pre-transaction  transaction            
                                                          growth      EOY
                                                                      Fiscal
                                                                      2013
                                                                  
Joe’s Crab Shack         129
Brick House Tavern +     15                                         
Tap
                         144                              14          158
Romano’s Macaroni
Grill
Company-owned                              186            (3)       183
Franchised                                24                        24
Total                   144              210           11       365

Planned 2013 net growth considers as many as 11 net new locations. As
previously announced the Company will open 14 new Joe’s Crab Shack and/or
Brick House units and convert as many as two units. Additionally, as many as
three Romano’s Macaroni Grill units may be closed or converted to Joe’s or
Brick House units during fiscal 2013.

Fiscal 2013 Projected Revenues (amounts in millions)

                     Ignite          Romano’s                % Increase as a
                    Restaurant     Macaroni               result of
                     Group           Grill          Total     combination
Forecasted IRG       $510 to $520    $180 to $190   $690 to   36       %
2013                                                $710
Pro Forma 2013       $510 to $520    $380 to $400   $890 to   76       %
Revenues ^1                                         $920

(1) Pro Forma 2013 Revenues assumes the acquisition occurred on January 1,
2013 and reflects an additional $200 million to $210 million of Romano’s
Macaroni Grill revenue over our forecasted IRG 2013 revenue

The Company’s forecasted revenues are based in part on the following
assumptions:

  *As many as 16 new Joe’s Crab Shack and/or Brick House restaurants,
    including two potential conversions,
  *An approximate 1% comparable sales increase, and
  *The transaction closing late in the second quarter of 2013 and including
    approximately 7 additional months of revenue over and above the revenue
    assumed for forecasted IRG 2013. Actual revenue may differ materially from
    forecasted and pro forma revenue.

Acquisition-Related Costs

The Company expects to incur approximately $8 million in acquisition related
costs, of which approximately $7 million will be expensed at the close or
within the first six months post-close. These costs include legal, accounting
and bank fees, as well as, specific integration costs such as relocation and
severance.

KeyBanc Capital Markets is serving as exclusive financial advisor to Ignite
Restaurant Group. Additionally, KeyBank National Association and Bank of
America Merrill Lynch are Joint Lead Arrangers and Joint Bookrunners on the
transaction financing.

Conference Call

The Company will host a conference call with an accompanying slide
presentation to discuss the acquisition today at 5:00 PM Eastern Daylight
Time. Hosting the call will be Ray Blanchette, President and Chief Executive
Officer, and Michael Dixon, Senior Vice President and Chief Financial Officer.
The conference call can be accessed live over the phone by dialing
888-298-3457 or for international callers by dialing 719-325-2332. The slide
presentation will be available ahead of the call and can be accessed at
www.igniterestaurants.com under the “Investors” section. A replay will be
available one hour after the call and can be accessed by dialing 877-870-5176
or 858-384-5517 for international callers; the password is 8988434. The replay
will be available until February 13, 2013. The call will also be webcast live
from the Company's website at www.igniterestaurants.com, also under the
“Investors” section.

About Ignite Restaurant Group

Ignite Restaurant Group, Inc. owns and operates 129 Joe's Crab Shacks and 15
Brick House Tavern + Taps. Each brand offers a variety of high-quality,
chef-inspired food and beverages in a distinctive, casual, high-energy
atmosphere. Joe's Crab Shack and Brick House Tavern + Tap operate in a diverse
set of markets across the United States.

About Golden Gate Capital

Golden Gate Capital is a San Francisco-based private equity investment firm
with over $12 billion of capital under management. The principals of Golden
Gate have a long and successful history of investing across a wide range of
industries and transaction types, including going-privates, corporate
divestitures, and recapitalizations, as well as debt and public equity
investments. Golden Gate is one of the most active investors in multi-unit
consumer companies in the country. Representative investments include Payless
ShoeSource, Coldwater Creek, Pacific Sunwear, California Pizza Kitchen, Eddie
Bauer, J.Jill, Express, Zales, and On the Border Mexican Grill and Cantina.
For additional information, visit www.goldengatecap.com.

Cautionary Note Regarding Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of
the federal securities laws. Forward-looking statements are subject to known
and unknown risks and uncertainties, many of which may be beyond the Company’s
control. The Company cautions you that the forward-looking information
presented in this press release is not a guarantee of future events, and that
actual events and results may differ materially from those made in or
suggested by the forward-looking information contained in this press release.
In addition, forward-looking statements generally can be identified by the use
of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable
with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or
“continue” or the negative thereof or variations thereon or similar
terminology. Examples of forward-looking statements in this press release
include our forecasted revenue for fiscal 2013, our pro forma revenues for
2013 assuming the Romano’s Macaroni Grill transaction occurred on January 1,
2013, and our estimated acquisition costs.

A number of important factors could cause actual events and results to differ
materially from those contained in or implied by the forward-looking
statements included in this press release, including the risk factors
discussed in the Company’s Registration Statement on FormS-1/A, filed on
May8, 2012 with the Securities and Exchange Commission (SEC), as supplemented
by the risk factors included in the Company’s Quarterly Report on Form 10-Q
for the twelve and thirty-six weeks ended September 12, 2012 (which can both
be found at the SEC’s website www.sec.gov) and each such risk factor is
specifically incorporated into this press release. In addition, we are subject
to risks and uncertainties regarding our ability to close the Romano’s
Macaroni Grill acquisition and the timing for any such closing, our ability to
successfully finance the acquisition, our ability to integrate Romano’s
Macaroni Grill into Ignite, our ability to realize expected synergies from the
acquisition and when the benefits from any synergies will be realized, the
level of fees, expenses and charges related to the acquisition, and our
ability to timely implement appropriate internal controls and disclosure
controls with respect to the Macaroni Grill assets following the acquisition
and satisfy requirements to file Macaroni Grill financial information with the
SEC. Any forward-looking information presented herein is made only as of the
date of this press release, and the Company does not undertake any obligation
to update or revise any forward-looking information to reflect changes in
assumptions, the occurrence of unanticipated events, or otherwise.

Contact:

Investor Relations for Ignite Restaurant Group
Fitzhugh Taylor
203-682-8261
fitzhugh.taylor@icrinc.com
or
Media Relations for Ignite Restaurant Group
Liz Brady DiTrapano
646-277-1226
liz.brady@icrinc.com
or
Media Contact for Golden Gate Capital
Paul Kranhold or Jenny Gore
415-618-8750
 
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