Contact: Buffets/Caxton-Iseman Capital Ryan's Restaurant Group
Mark Semer Fred T. Grant, Jr.
Kekst and Company Sr. Vice President -
Finance
(212) 521-4800 (864) 879-1000
BUFFETS AND RYAN'S RESTAURANT GROUP TO COMBINE IN
$876 MILLION TRANSACTION, CREATING NATION'S
LARGEST BUFFET RESTAURANT CHAIN
Combined Company to Operate Approximately 675 Restaurants in 42
States
Ryan's Shareholders to Receive $16.25 Per Share in Cash
Eagan, Minnesota and Greer, South Carolina, July 25, 2006 -
Buffets, Inc., a leading owner and operator of buffet-style
restaurants, and Ryan's Restaurant Group, Inc. (Nasdaq: RYAN),
the leading publicly traded buffet operator, today announced
the signing of an agreement under which a subsidiary of Buffets
will merge with Ryan's in a cash transaction valued at
approximately $876 million, including debt that will be assumed
or repaid at or prior to closing. Buffets is owned by an
investment partnership organized by Caxton-Iseman Capital,
Inc., a New York-based private equity firm, and the senior
management of Buffets.
The transaction will create the nation's largest buffet
restaurant chain and one of the five largest companies in the
casual and mid-scale dining segment. The combined company will
have annual revenues of more than $1.7 billion, a national
footprint, and operate approximately 675 restaurants
principally under the well-respected Ryan'sr Grill, Buffet &
Bakery, Fire Mountainr, Old Country Buffetr and HomeTown
Buffetr brands.
Under terms of the agreement, which has been unanimously
approved by the boards of directors of both companies, Ryan's
shareholders will receive $16.25 in cash for each common share
they own, representing an approximate 45% premium over Ryan's
closing share price on July 24, 2006.
The combined company will continue to be called Buffets, Inc.
and will continue to be headquartered in Eagan, Minnesota.
Ryan's will operate as a separate division of Buffets and will
continue to be based in Greer, South Carolina. R. Michael
Andrews, Chief Executive Officer of Buffets, will continue to
serve in this capacity for the combined company, which will
have approximately 43,000 employees.
Mr. Andrews said: "Our combination with Ryan's is an
outstanding opportunity for Buffets, as we are combining two
complementary businesses from a geographic, operational and
cultural perspective. Ryan's leading position in the South
will balance Buffets' leading position in the North and West,
allow for continued brand development in our core markets and
provide further opportunities for geographic expansion. As one
company, we will capitalize on opportunities in purchasing,
marketing and restaurant operations. Most importantly, the
people of both companies - from senior management to the store
level staff - share a deep commitment to creating positive
dining experiences for our customers on a daily basis, and
providing an enjoyable and rewarding workplace for our
employees.
"We are excited about the opportunity to work together with the
Ryan's team to apply best practices from each company across
our organization. We expect that the result of our efforts
will be a national restaurant chain even better positioned to
provide its millions of customers with delicious meals at a
great value in a family oriented environment," Mr. Andrews
concluded.
Charles D. Way, Chief Executive Officer of Ryan's, said: "Since
opening its first restaurant in 1978, Ryan's has strived to
serve great meals to our loyal customers, to be a great place
for our employees to work and to create value for our
shareholders. In joining forces with Buffets, we have found a
partner committed to each of these principles. Buffets
respects the heritage of our brands and, like Ryan's, has a
long history of great customer service and treating its
employees as partners in its success. Importantly, we believe
this transaction will deliver substantial value to our
shareholders, whom we thank for their support. Our entire team
is committed to working with the Buffets leadership to complete
a successful integration."
Steven M. Lefkowitz, a Managing Director of Caxton-Iseman,
said: "We are pleased to back this outstanding management team
led by Mike Andrews in an exciting growth initiative. The
Ryan's management team has done an impressive job developing
two outstanding brands, and we look forward to building on
their success. We believe the combination of these businesses
brings together the assets, skills and resources to create a
new entity that is greater than the sum of its parts. Mike and
his colleagues have our full support as they work to further
strengthen the company for the benefit of our employees,
customers and their communities."
Completion of the transaction, which is expected to occur in
the fourth quarter of 2006, is subject to approval by Ryan's
shareholders, regulatory approvals, receipt of financing and
other customary closing conditions.
It is anticipated that the transaction will be funded through a
combination of bank debt, senior subordinated debt and real
estate financing, which will result in a full refinancing of
Buffets' and Ryan's existing debt. The debt financing for the
transaction has been committed by Credit Suisse Securities
(USA) LLC and UBS Securities LLC, and the real estate financing
has been committed by affiliates of Fortress Investment Group
LLC.
Buffets' financial advisor with respect to this transaction is
Berenson & Company, LLC, and its legal advisor is Paul, Weiss,
Rifkind, Wharton & Garrison LLP. Ryan's financial advisor with
respect to this transaction is Brookwood Associates, LLC, and
its legal advisor is Wyche, Burgess, Freeman & Parham, P.A.
About Buffets
Buffets currently operates 337 restaurants in 33 states
comprised of 328 buffet restaurants and nine Tahoe Joe's Famous
Steakhouser restaurants. The buffet restaurants are principally
operated under the Old Country Buffetr or HomeTown Buffetr
brands. Buffets also franchises 18 buffet restaurants in seven
states.
About Ryan's Restaurant Group
Ryan's Restaurant Group, Inc. (Nasdaq: RYAN), headquartered in
Greer, South Carolina, is a leading restaurant company
operating approximately 340 Ryan'sr Grill, Buffet & Bakery and
Fire Mountainr restaurants in 23 states primarily in the
Southern and Midwestern United States. Ryan's employs
approximately 23,000 team members and serves more than 110
million customers annually.
About Caxton-Iseman Capital
Caxton-Iseman Capital, Inc. is a New York-based private equity
firm. In addition to Buffets, its portfolio companies include
Ply Gem Industries, Inc., a manufacturer of vinyl building
products; Electrograph Systems, Inc., a leading national value-
added distributor of display technology solutions; and Prodigy
Health Group, Inc., a health care services company. Caxton-
Iseman's investment vehicles have available capital in excess
of $2 billion.
Cautionary Language Concerning Forward-Looking Statements
Statements herein regarding the proposed transaction between
Buffets, Inc., a subsidiary of Buffets Holdings, Inc. and
Ryan's Restaurant Group, Inc., future financial and operating
results, benefits and synergies of the transaction, future
opportunities for the combined company and any other statements
about future expectations constitute forward looking statements
within the meaning of the Private Securities Litigation Reform
Act of 1995. Such statements are based upon current beliefs
and expectations and are subject to significant risks and
uncertainties. There are a number of important factors that
could cause actual results or events to differ materially from
those indicated by such forward looking statements, including:
the ability to obtain governmental approvals of the transaction
on the proposed terms and schedule and the ability of Buffets,
Inc. to achieve synergies in connection with the merger and the
integration of Ryan's Restaurant Group, Inc. successfully into
its business. Each of Buffets Holdings, Inc., Buffets, Inc. and
Ryan's Restaurant Group, Inc. disclaims any intention or
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or
otherwise.
Additional factors that may affect future results are contained
in each company's filings with the Securities and Exchange
Commission ("SEC"), including Buffets Holdings, Inc.'s Annual
Report on Form 10-K for the year ended June 29, 2005 and Ryan's
Restaurant Group, Inc.'s Annual Report on Form 10-K for the
year ended December 28, 2005, each of which is available at the
SEC's Web site http://www.sec.gov. The information set forth
herein speaks only as of the date hereof, and any intention or
obligation to update any forward looking statements as a result
of developments occurring after the date hereof is hereby
disclaimed.
Important Information Will Be Filed with the SEC
In connection with the proposed transaction, Ryan's Restaurant
Group, Inc. plans to file with the SEC a Proxy Statement.
Investors and security holders of Ryan's Restaurant Group, Inc.
are urged to read the Proxy Statement and any other relevant
documents filed with the SEC when they are available because
they will contain important information about Ryan's Restaurant
Group, Inc., the proposed merger and related matters. The
final Proxy Statement will be mailed to stockholders of Ryan's
Restaurant Group, Inc. Investors and security holders of
Ryan's Restaurant Group, Inc. will be able to obtain copies of
the Proxy Statement, when they become available, as well as
other filings with the SEC that will be incorporated by
reference into such documents, containing information about
Ryan's Restaurant Group, Inc., without charge, at the SEC's
Internet site (http://www.sec.gov). These documents may also
be obtained for free from Ryan's Restaurant Group, Inc. by
directing a request to Ryan's Restaurant Group, Inc., Investor
Relations, PO Box 100, Greer, SC 29652, or at Ryan's Restaurant
Group, Inc.'s Investor Relations page on its corporate website
at www.ryans.com.
Participants in Solicitation
Ryan's Restaurant Group, Inc. and its respective directors and
executive officers and other members of management and
employees may be deemed to be participants in the solicitation
of proxies from Ryan's Restaurant Group, Inc.'s stockholders in
respect of the proposed merger. Information regarding Ryan's
Restaurant Group, Inc.'s directors and executive officers is
available in Ryan's Restaurant Group, Inc.'s proxy statement
for its 2006 annual meeting of stockholders, which is filed
with the SEC. Additional information regarding the interests of
such potential participants will be included in the proxy
statement and the other relevant documents filed with the SEC
when they become available.