Luby’s Inc., which purchased burger chain Fuddruckers two years ago, came back for seconds this week, announcing it will acquire the 23-unit Cheeseburger in Paradise chain. Houston based Luby’s will pay $11 million plus “customary reimbursements for cash-on-hand, inventory, and accounts receivable offset by liabilities assumed at closing.” Prior-year revenues for those Cheeseburger in Paradise locations were roughly $50 million.
Luby’s can be expected to look at opportunities to co-brand Cheeseburger in Paradise with its core Luby’s cafeteria concept, as it has done with Fuddruckers. In August, Luby’s opened a side-by-side Luby’s Cafeteria and Fuddruckers in Pearland, Texas, a suburb of its Houston headquarters city.
Luby’s occupies about 8,500 square feet of the co-branded building, with Fuddruckers taking approximately 2,500 square feet. The dining rooms of the two concepts can each access a 460-square-foot patio.
In a statement, Luby’s President-CEO Chris Pappas said, “Cheeseburger in Paradise will nicely complement our core family-friendly brands, Luby’s Cafeterias and Fuddruckers, with a casual dining restaurant and bar offering. A number of their 23 locations are located in high traffic areas, many near successful malls and tourist attractions. With the addition of Cheeseburger in Paradise, we will further enhance our competiveness and increase the Company’s opportunities for revenue growth in the future.”
In June, Burger King Worldwide completed its complicated $1.4 billion business combination with Justice Holdings (with 3G Capital continuing as majority shareholder). Additionally, there have been several other restaurant-industry mergers/acquisitions this year, including Darden buying Yard House for $585 million; Landry’s acquisitions of both McCormick & Schmick’s ($131.6 million) and Morton’s Restaurant Group ($116 million); and Starbucks’ recent announcement that it will absorb Teavana in a $620 million all-cash deal.