RB 28/2008 Membership Interest Purchase Agreement – Apple Grove
19-05-2008

The Management Board of AmRest Holdings N.V. (“AmRest”) informs about signing of the Membership Interest Purchase Agreement (“Purchase Agreement”) between AmRest (“Buyer”) and Grove Ownership Holding, LLC (“Seller”), a Georgia limited liability company, dated 20 May 2008.
 
Seller owns 100% of Apple Grove Holdings, LLC, a Delaware limited liability company (“AGH”).  AGH owns 100% of Restaurant Concepts II, LLC (“RCI II”), a Georgia limited liability company and WCM Oregon, LLC (“WCMO”), an Oregon limited liability company.  RCI II and WCMO operate 104 Applebee’s® Neighborhood Grill & Bar restaurants in the United States (“Restaurants”). The approximate trailing 12 months sales volume of Restaurants was $260 million.
 
Based on the Purchase Agreement AmRest will acquire 80% of AGH.
 
Both Parties agreed to close the transaction by July 1, 2008 (“Closing Date”). The Parties may mutually determine other date provided that the closing has not occurred on or before July 1, 2008 due to delays in acquiring any approvals from third parties or governmental authorities necessary to consummate this Purchase Agreement. The Closing Date however may be not extended by more than 30 days.
 
The Purchase Price is $85 million plus (if positive) and minus (if negative) the Preliminary Net Working Capital, and minus the Preliminary Long Term Debt as of June 29, 2008, multiplied by 80%.  
 
The Purchase Price is subject to adjustments depending on the shape of Final Closing Balance Sheet and Final Adjustment Period Income Statement (collectively “Final Purchase Price Factors”), which will be both determined at Closing Date. For purposes of computing Final Purchase Price Factors the calculation will reflect exclusions related to extraordinary items, costs and results of new development projects and results of business to be discontinued. If the EBITDA for the 12 month period of April 1, 2007 through March 31, 2008 (“Adjustment Period”) is below $15 million then the Purchase Price shall be adjusted down by 6x the shortfall. Additional to the Purchase Price AmRest will pay an Option Premium in the amount $5 million at Closing Date.
 
The Purchase Price will be paid by the Buyer at the Closing Date in cash. The Purchase will be financed by the additional debt.
 
The condition precedents to closing are:

  1. AmRest Supervisory Board approval
  2. Apple Grove Holding’s Operating Agreement finalization
  3. Approval of Applebee’s®  Franchisor

 
 
The purchase of 104 Applebee’s® restaurants represents AmRest’s entry into the US restaurant market, which is the world’s largest restaurant market, and significant strengthening of the Company’s Casual Dining Restaurants’ arm. Although AmRest intends to further develop the newly acquired brand and increase its engagement on this new market, its core strategy of Central and Eastern Europe dominance, remains unmodified and is a priority in the coming years.  This acquisition is part of a strategy for a broader relationship with Applebee’s the world’s leading casual dining brand.
 
 
 
Legal act:
Ustawa o ofercie z dnia 29 lipca 2005 art. 56. ust. 1 punkt 2.

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