HW&Co. Industry Reader Template - Harris Williams€¦ · Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrarof Companiesfor Englandand Wales under companynumber

www.harriswilliams.de

Harris Williams & Co. Ltd is a private limited company authorised and regulated by the Financial Conduct Authority, incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 07078852. Directors: Mr. Ned Valentine, Mr. Paul Poggi, Mr. Thierry Monjauze and Mr. Aadil Khan.

Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.

Solebury Capital LLC is a registered broker-dealer and member of FINRA and SPIC.

RESTAURANTS

INDUSTRY UPDATE | DECEMBER 2017

PAGE |

www.harriswilliams.de

OVERVIEW

1

CONTENTS

Economic Trends

Public Company Summary

Limited Service

Full Service

Debt Markets

M&A Activity

OUR PRACTICE

Harris Williams & Co. is a leading advisor to middle market companies. Our restaurant experience covers a broad range of concepts and business models. This particular report focuses on trends and metrics in the following areas:

Quick Service

Fast Casual

Pizza

Beverage

Differentiated Casual

Casual

Family Dining

Fine Dining

CONTACTS

Tim AlexanderManaging [email protected]+1 (612) 359-2716

Ed ArkusManaging [email protected]+44 20 7518 8905

Ryan BudlongManaging [email protected]+1 (415) 217-3409

Will [email protected]+44 20 7518 8906

Brant [email protected]+1 (612) 359-2709

Ryan [email protected]+1 (612) 359-2703

Andy WarczakVice [email protected]+1 (612) 359-2714

Brant WilczekVice [email protected]+1 (612) 359-2732

WHAT WE’VE BEEN UP TO

RESTAURANTS

INDUSTRY UPDATE │ DECEMBER 2017

2017 RESTAURANT TRANSACTIONS

On January 31, 2018, a family office acquired Huddle House, aportfolio company of Sentinel Capital Partners, adding to the

continued momentum of HW&Co’s food and beverage group.

Company Description:

Huddle House is a leading franchisor and operator of over 350 home-

style, full-service restaurants across the U.S. Huddle House occupies adifferentiated niche in the restaurant industry through focusing on all-

day breakfast, serving smaller communities with limited competition,and by combining the value and convenience of quick-service

restaurants with the food quality and friendly service of a sit-downrestaurant.

Key Value Drivers:

Attractive model with strong new unitperformance.

Strong franchise system.

Food distribution network.

Leading position in small markets withsignificant whitespace for growth.

Deep, experienced management team.

established the Burger King UK

Master Franchisee

an affiliate ofhas been acquired by

a portfolio company of

A Family Office Investor

has been acquired by

a partnership of

&

http://www.harriswilliams.com/

mailto:[email protected]








PAGE |

70

80

90

100

110

120

130

140

150

Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17

Beef Pork Chicken

Cheese Bread

ECONOMIC TRENDS

2

RESTAURANTS


EMPLOYMENT1 CONSUMER CONFIDENCE2

(in millions)

LABOR PARTICIPATION RATE1 WAGE GROWTH VS CONSUMER PRICE INDEX1

AT HOME AND RESTAURANT SPENDING3 COMMODITY PRICE INDICES1

50

60

70

80

90

100

110


61%

62%

63%

64%

Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17-1%

0%

1%

2%

3%


120

125

130

135

140

145

150

0%

2%

4%

6%

8%

10%

12%


40%

45%

50%

55%

60%

Nov-12 Nov-13 Nov-14 Nov-15 Nov-16 Nov-17

Un

em

plo

ym

en

t R

ate To

tal E

mp

loym

en

t Ind

exe

d V

alu

e

Lab

or

Pa

rtic

ipa

tio

n R

ate

Yo

Y G

row

th R

ate

% o

f To

tal S

pe

nd

Ind

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d V

alu

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Consumer Price Index Wage Growth

Total Employment Unemployment Rate

Food Away from Home Food at Home

PAGE |

Report SSS Revenue EBITDA EPS FY 2017 Price Chg.

Issuer Date Below In-line Above Below In-line Above Below In-line Above Below In-line Above Guidance 1-Day

10/25/2017 P 10bps P -0.9% P 13.2% P 72.2% ↑ 19.6%

11/9/2017 P 0bps P -1.0% P 19.1% N/M ↓ 13.5%

11/2/2017 P 170bps P 3.4% P 9.3% P 6.3% Confirms 13.1%

11/2/2017 P 20bps P -0.6% N/A P -13.6% ↓ 5.9%

11/2/2017 P 130bps P -25.6% P -20.0% P -85.7% ↑ 5.4%

11/1/2017 P 30bps P 0.1% P -4.9% P 0.0% ↓ 4.5%

11/9/2017 P -50bps P 0.0% P 10.6% P 0.0% ↓ 3.5%

11/2/2017 P -130bps P -1.9% N/P P 0.0% N/A 2.1%

10/26/2017 P -30bps P 4.5% N/P P -3.2% Confirms 0.4%

11/8/2017 P 110bps P 7.2% P 4.4% P 133.3% Mixed 0.4%

11/6/2017 N/A P -2.1% P -31.3% P -73.9% N/A -2.9%

11/1/2017 P 100bps P 0.5% P 15.4% P 13.3% ↑ -3.4%

11/3/2017 P 10bps P -1.5% P 3.4% P 16.7% Confirms -3.9%

10/12/2017 P 190bps P 2.4% N/P P 3.3% N/A -3.9%

10/17/2017 P -390bps P -4.6% P -19.3% P -41.2% ↓ -7.5%

11/2/2017 P -60bps P -2.4% P -6.1% P -16.7% ↓ -12.9%

10/24/2017 P -20bps P -0.7% N/P P -10.4% ↓ -14.6%

11/1/2017 P -40bps P -1.3% P -1.1% P -66.7% ↓ -24.7%

Mean -103bps 7bps 107bps -5.1% -0.3% 4.4% -13.8% - 10.8% -38.9% 0.0% 40.8% -0.3%

Median -50bps 10bps 110bps -2.0% -0.3% 3.9% -12.7% - 10.6% -28.9% 0.0% 15.0% 0.4%

PUBLIC COMPANY PERFORMANCE4,5

3

RESTAURANTS


SUMMARY INFORMATION

SOLEBURY’S Q3 2017 RESTAURANT EARNINGS RECAP

Solebury’s quarterly restaurant industry earnings recap tracks the performance of select public restaurant concepts relative to industry research analysts’ expectations. Solebury Capital is a leading independent capital markets advisory firm, providing clients with independent advice, highly-informed judgment, and transaction management services. Harris Williams & Co. and Solebury Capital are subsidiaries of PNC.

Segment

# of

Companies

Quick Serv ice 7 23.6x 17.2x 15.0x 2.0%

Fast Casual 10 48.6x 16.6x 10.9x (0.4%)

Pizza 3 27.7x 13.5x 12.2x 1.7%

Beverage/Snack Retail 3 23.6x 16.6x 14.1x 0.2%

Limited Serv ice 23 27.6x 16.6x 13.2x 0.2%

Differentiated Casual 4 22.5x 9.4x 9.3x (1.9%)

Casual Dining 6 26.7x 9.0x 9.4x (0.6%)

Family Dining 3 22.3x 10.3x 10.6x 0.2%

Fine Dining 3 22.8x 9.2x 7.5x (4.0%)

Full Serv ice 16 24.3x 9.5x 9.4x (1.7%)

Median

P/E

Median

EV/LTM

EBITDA

Median

TEV/'18E

EBITDA

Median

SSS Growth

N/A: Not Applicable N/P: Not Provided Guidance Relative to Expectations:

↑ Above − In-line ↓ Below

PAGE |

(2.0%)

(1.0%)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317

PUBLIC COMPANY PERFORMANCE – LIMITED SERVICE4,5

4

RESTAURANTS


MEDIAN SAME-STORE SALES GROWTH

LTM SAME-STORE SALES GROWTH (QUARTERLY AVERAGE)

UNIT COUNT GROWTH (YOY)

LTM EBITDA MARGIN

(0.7%)

0.3%

4.2% 1.7%

(3.5%)

1.7% 2.3%

5.5%

0.8%

(6.9%)

5.9%

0.6%

(2.6%) (3.2%)(1.1%)

1.5%

(1.7%)

10.1%

2.2%

(5.3%)(3.3%)

0.2%

3.0%

7.2% 0.8% 1.0%

6.2% 1.0% 1.3%

7.8% 9.0% 6.1%

(7.8%)

41.4%

21.9%

(9.3%)

12.6%

36.2%

14.6% 20.8%

8.9% 2.6%

(2.5%)

4.9% 3.0% 9.0%

QSR Fast Casual Pizza Beverage/Snack Retail

2.0%

(0.4%)

1.7%0.2%

13.6%

22.0%

41.1% 44.6%

32.2% 28.3%

31.3%

10.0% 14.4%

11.2%

42.0%

9.5%

3.3% 8.4%

15.8%

37.6%

7.5%

19.9%

11.3% 11.4%

3.0%

54.7%

22.2%

PAGE |

PUBLIC COMPANY VALUATION – LIMITED SERVICE4,5

5

RESTAURANTS


MEDIAN EV/LTM EBITDA TREND*

INDEXED SHARE PRICE CHANGE

EV/LTM EBITDA

YEAR OVER YEAR SHARE PRICE CHANGE

0

50

100

150

200

250

300

350

12

'12

03

'13

06

'13

09

'13

12

'13

03

'14

06

'14

09

'14

12

'14

03

'15

06

'15

09

'15

12

'15

03

'16

06

'16

09

'16

12

'16

03

'17

06

'17

09

'17

12

'17

(36.7%)

(12.1%)

41.4%

29.0%

3.7%

21.4% 28.9%

(23.4%)(19.5%)

(36.3%)(44.6%)

28.0%

(4.7%)

20.7%

31.7%

(30.3%)

18.7%

(34.4%)

27.5%

(43.1%)

22.9%

3.4%

QSR Fast Casual Pizza Beverage/Snack Retail S&P 500

243

116

234

115

191

* Median of the Component Companies’ Median EV/LTM EBITDA Multiple.

QSR Fast Casual Pizza Beverage/Snack Retail S&P 500

N/A

8.3x10.4x

11.7x13.2x 12.2x

15.8x14.6x

23.9x

17.9x 18.5x

13.1x15.7x

10.7x

13.4x 14.2x

17.4x15.8x 15.5x

16.6x

19.3x 18.3x 19.2x

15.9x 16.1x

8.2x 9.2x 10.2x 10.9x 11.6x12.8x

2012 2013 2014 2015 2016 2017

8.3x

12.2x

17.2x20.1x

12.0x

19.0x 19.3x17.4x

8.0x 7.5x

21.1x

7.2x

17.6x

8.1x

28.6x

33.3x

15.9x

22.1x

12.2x 13.5x 13.8x17.2x 16.6x

PAGE |

PUBLIC COMPANY PERFORMANCE – FULL SERVICE4,5

6

RESTAURANTS


MEDIAN SAME-STORE SALES GROWTH

LTM SAME-STORE SALES GROWTH (QUARTERLY AVERAGE)

UNIT COUNT GROWTH (YOY)

LTM EBITDA MARGIN

(5.0%)

(4.0%)

(3.0%)

(2.0%)

(1.0%)

0.0%

1.0%

2.0%

3.0%

4.0%

Q415 Q116 Q216 Q316 Q416 Q117 Q217 Q317

(1.7%)

(0.4%)(1.2%)

1.3%

(1.1%)

(2.4%)

1.9%

(4.5%)

(1.3%)

3.2%

(0.1%)

0.8%

(3.1%)

(1.4%) (1.6%)

0.5%

7.1%

2.0%

11.7%

14.8%

(1.1%)

1.8%

10.5%

(0.7%)

3.1%

6.5%

1.2%

(0.2%)

(2.8%)

3.9%

11.6%

2.0%

Differentiated

CasualCasual Dining Family Dining Fine Dining

11.3% 11.7% 11.0%

24.0%

9.5%

13.7% 13.0%

36.5%

9.8%

13.3% 13.5%

22.4%

3.7%

11.0%

18.2% 15.2%

(1.9%)

(0.6%)

0.2%

(4.0%)

PAGE |

0

50

100

150

200

250

12

'12

03

'13

06

'13

09

'13

12

'13

03

'14

06

'14

09

'14

12

'14

03

'15

06

'15

09

'15

12

'15

03

'16

06

'16

09

'16

12

'16

03

'17

06

'17

09

'17

12

'17

191

PUBLIC COMPANY VALUATION – FULL SERVICE4,5

7

RESTAURANTS


MEDIAN EV/LTM EBITDA TREND*

INDEXED SHARE PRICE CHANGE

EV/LTM EBITDA

YEAR OVER YEAR SHARE PRICE CHANGE

(7.4%)

(19.5%)(13.6%)

(2.0%)

18.4%

(21.6%)

32.0%

(34.1%)

0.0%

9.2%

(4.8%)

3.2%

(38.3%)

(10.3%)

(19.2%)

18.3%

Differentiated

CasualCasual Dining Family Dining Fine Dining S&P 500

192

175155142

* Median of the Component Companies’ Median EV/LTM EBITDA Multiple.

14.1x

10.8x11.4x 11.7x

9.8x 9.8x

8.2x9.5x

10.2x11.0x

8.9x8.3x

7.5x

9.7x10.4x

12.0x11.0x

10.4x

7.9x

10.8x11.4x

9.8x 9.6x 9.4x8.2x

9.2x10.2x

10.9x11.6x

12.8x

2012 2013 2014 2015 2016 2017

Differentiated

CasualCasual Dining Family Dining Fine Dining S&P 500

8.1x9.0x

11.8x

9.9x

8.2x7.5x

13.1x

9.7x

7.7x

13.0x

10.4x 10.3x

7.8x9.2x

7.9x

11.5x

PAGE |

PUBLIC COMPANY PERFORMANCE4,5

8

RESTAURANTS


* Percentage Franchised is Based on 2016 YE Units.

*

SUMMARY

Price at As a % of Market Enterprise % P/E

($ in millions, except per share data) Ticker 12/31/17 52-wk High Cap Value Franchised Revenue EBITDA 1 Year 3 Years Gross EBITDA Multiple Revenue EBITDA Revenue EBITDA

Quick Service Restaurant

Bojangles, Inc. BOJA $11.80 52.8% $437 $608 57% $539 $73 3.4% NA 17.8% 13.6% 13.7x 1.13x 8.3x 1.11x 9.0x

Jack in the Box Inc. JACK 98.11 86.8% 2,888 4,171 73% 1,554 342 (2.8%) 1.5% 27.0% 22.0% 22.4x 2.68x 12.2x 5.10x 14.9x

McDonald's Corporation MCD 172.12 97.9% 137,212 166,311 85% 23,509 9,672 (5.7%) (5.6%) 46.5% 41.1% 27.0x 7.07x 17.2x 7.91x 16.0x

Restaurant Brands International Inc QSR 61.48 89.2% 14,649 40,825 100% 4,551 2,032 6.4% 58.3% 48.1% 44.6% 41.9x 8.97x 20.1x 8.22x 17.6x

Sonic Corp. SONC 27.48 91.4% 1,073 1,743 93% 453 146 (23.2%) (7.1%) 41.1% 32.2% 18.8x 3.85x 12.0x 3.84x 11.4x

Wendy's Company WEN 16.42 96.7% 3,977 6,581 95% 1,224 346 (23.0%) (17.1%) 36.4% 28.3% NM 5.38x 19.0x 5.19x 15.0x

Yum! Brands, Inc. YUM 81.61 96.8% 27,502 37,444 93% 6,197 1,939 (3.9%) NM 44.1% 31.3% 24.7x 6.04x 19.3x 7.82x 18.1x

Mean (7.0%) 6.0% 37.3% 30.4% 24.8x 5.02x 15.4x 5.60x 14.6x

Median (3.9%) (5.6%) 41.1% 31.3% 23.6x 5.38x 17.2x 5.19x 15.0x

Fast Casual

Chipotle Mexican Grill, Inc. CMG $289.03 57.9% $8,160 $7,671 0% $4,401 $442 13.8% 4.3% 13.0% 10.0% 56.0x 1.74x 17.4x 1.57x 13.2x

El Pollo Loco Holdings Inc LOCO 9.90 66.7% 383 459 56% 399 58 6.7% 0.1x 19.5% 14.4% 43.0x 1.15x 8.0x 1.09x 7.3x

Fiesta Restaurant Group, Inc. FRGI 19.00 62.9% 514 568 11% 678 76 (5.8%) 4.7% 17.6% 11.2% NM 0.84x 7.5x 0.85x 8.1x

Freshii, Inc. FRI I -CA 5.86 51.0% 148 152 99% 17 7 12.0% NA 86.2% 42.0% NM 8.86x 21.1x 5.07x 13.9x

Habit Restaurants, Inc. HABT 9.55 48.4% 222 219 6% 320 30 18.4% 25.6% 14.1% 9.5% 39.8x 0.68x 7.2x 0.56x 7.2x

Noodles & Co. NDLS 5.25 87.5% 208 278 14% 473 16 (0.4%) 7.0% 8.7% 3.3% NM 0.59x 17.6x 0.60x 8.7x

Potbelly Corp. PBPB 12.30 86.1% 305 285 9% 418 35 4.6% 9.7% 13.3% 8.4% NM 0.68x 8.1x 0.65x 7.5x

Shake Shack, Inc. SHAK 43.20 92.1% 1,532 1,522 44% 336 53 36.4% 0.5x 23.4% 15.8% NM 4.53x 28.6x 3.32x 23.2x

Wingstop, Inc. WING 38.98 90.1% 1,134 1,276 98% 102 38 17.0% NA 69.1% 37.6% 54.1x 12.51x 33.3x 11.04x 27.4x

Zoe's Kitchen, Inc. ZOES 16.72 64.5% 325 363 1% 305 23 14.3% 23.8% 12.6% 7.5% NM 1.19x 15.9x 1.01x 13.2x

Mean 11.7% 16.2% 27.8% 16.0% 48.2x 3.28x 16.5x 2.58x 13.0x

Median 12.9% 9.0% 15.9% 10.6% 48.6x 1.17x 16.6x 1.05x 10.9x

Pizza

Domino's Pizza, Inc. DPZ $188.96 85.3% $8,264 $11,923 97% $2,716 $539 13.4% 12.3% 30.9% 19.9% 36.1x 4.39x 22.1x 3.85x 18.8x

Papa John's International, Inc. PZZA 56.11 63.9% 1,966 2,431 85% 1,755 198 3.8% 4.0% 17.9% 11.3% 19.3x 1.39x 12.2x 1.33x 12.2x

Papa Murphy's Holdings, Inc. FRSH 5.38 79.1% 91 190 89% 123 14 (1.4%) NA 28.7% 11.4% NM 1.54x 13.5x 1.91x 9.0x

Mean 5.3% 8.2% 25.8% 14.2% 27.7x 2.44x 16.0x 2.37x 13.3x

Median 3.8% 8.2% 28.7% 11.4% 27.7x 1.54x 13.5x 1.91x 12.2x

Beverage / Snack Retail

DAVIDsTEA, Inc. DTEA $3.90 49.1% $101 $72 0% $175 $5 10.3% 18.9% 43.5% 3.0% NM 0.41x 13.8x 0.39x 11.1x

Dunkin' Brands Group, Inc. DNKN 64.47 98.1% 5,823 7,972 100% 849 464 3.9% 4.8% 79.0% 54.7% 28.3x 9.39x 17.2x 9.21x 16.1x

Starbucks Corporation SBUX 57.43 88.5% 81,711 83,544 50% 22,726 5,047 4.9% 10.2% 23.7% 22.2% 19.0x 3.68x 16.6x 3.29x 14.1x

Mean 6.4% 11.3% 48.7% 26.6% 23.6x 4.49x 15.8x 4.30x 13.8x

Median 4.9% 10.2% 43.5% 22.2% 23.6x 3.68x 16.6x 3.29x 14.1x

Differentiated Casual

BJ's Restaurants, Inc. BJRI $36.40 76.6% $751 $954 0% $1,036 $117 7.9% 7.6% 10.7% 11.3% 23.9x 0.92x 8.1x 0.89x 8.0x

Cheesecake Factory Incorporated CAKE 48.18 71.8% 2,206 2,413 7% 2,292 268 4.2% 5.5% 14.6% 11.7% 17.7x 1.05x 9.0x 1.02x 9.4x

Chuy's Holdings, Inc. CHUY 28.05 85.3% 474 459 0% 353 39 9.3% 14.6% 13.6% 11.0% 30.8x 1.30x 11.8x 1.13x 9.9x

Dave & Buster's Entertainment, Inc. PLAY 55.17 75.1% 2,245 2,631 0% 1,105 266 14.0% 15.8% 22.4% 24.0% 21.1x 2.38x 9.9x 2.11x 9.2x

Mean 8.9% 10.9% 15.3% 14.5% 23.4x 1.41x 9.7x 1.29x 9.1x

Median 8.6% 11.1% 14.1% 11.5% 22.5x 1.18x 9.4x 1.08x 9.3x

Casual Dining Restaurant

Bloomin' Brands, Inc. BLMN $21.34 95.0% $1,948 $3,210 16% $4,130 $392 (3.9%) (2.0%) 11.5% 9.5% 26.7x 0.78x 8.2x 0.77x 8.1x

Brinker International, Inc. EAT 38.84 77.4% 1,798 3,194 40% 3,127 428 (3.4%) 1.7% 13.0% 13.7% 15.0x 1.02x 7.5x 1.02x 7.8x

Darden Restaurants, Inc. DRI 96.02 97.6% 11,875 13,025 3% 7,631 995 9.1% 13.4% 17.8% 13.0% 24.6x 1.71x 13.1x 1.57x 11.4x

DineEquity, Inc. DIN 50.73 64.9% 913 2,167 100% 610 223 (6.3%) (2.0%) 56.6% 36.5% NA 3.55x 9.7x 3.66x 10.6x

Red Robin Gourmet Burgers, Inc. RRGB 56.40 76.1% 730 1,007 16% 1,330 131 3.0% 6.3% 13.4% 9.8% 56.4x 0.76x 7.7x 0.73x 6.9x

Texas Roadhouse, Inc. TXRH 52.68 94.1% 3,746 3,718 17% 2,159 287 10.1% 11.6% 14.9% 13.3% 30.5x 1.72x 13.0x 1.53x 11.5x

Mean 1.4% 4.8% 21.2% 16.0% 30.6x 1.59x 9.9x 1.55x 9.4x

Median (0.2%) 4.0% 14.1% 13.2% 26.7x 1.36x 9.0x 1.27x 9.4x

Family Restaurant

Cracker Barrel Old Country Store, Inc. CBRL $158.89 93.2% $3,813 $4,110 0% $2,927 $396 0.2% 2.5% 15.5% 13.5% 19.2x 1.40x 10.4x 1.34x 9.7x

Denny's Corporation DENN 13.24 92.9% 864 1,206 90% 523 117 4.4% 4.6% 27.1% 22.4% 25.5x 2.30x 10.3x 2.21x 11.4x

Luby's, Inc. LUB 2.64 60.7% 77 108 40% 376 14 (5.2%) (1.6%) 8.0% 3.7% NM 0.29x 7.8x NA NA

Mean (0.2%) 1.8% 16.9% 13.2% 22.3x 1.33x 9.5x 1.77x 10.6x

Median 0.2% 2.5% 15.5% 13.5% 22.3x 1.40x 10.3x 1.77x 10.6x

Fine Dining

Del Frisco's Restaurant Group, Inc. DFRG $15.25 81.1% $324 $362 0% $359 $39 3.5% 6.9% 16.8% 11.0% 32.4x 1.01x 9.2x 0.93x 7.5x

Fogo de Chao, Inc. FOGO 11.60 68.0% 328 444 0% 307 56 7.9% 11.9% 22.3% 18.2% 15.9x 1.44x 7.9x 1.31x 7.5x

Ruth's Hospitality Group, Inc. RUTH 21.65 95.6% 677 694 54% 398 60 4.0% (1.1%) 23.5% 15.2% 22.8x 1.74x 11.5x 1.52x 9.6x

Mean 5.1% 5.9% 20.9% 14.8% 23.7x 1.40x 9.5x 1.25x 8.2x

Median 4.0% 6.9% 22.3% 15.2% 22.8x 1.44x 9.2x 1.31x 7.5x

LTM EV / LTM EV / 2018ERevenue Growth LTM Margins

PAGE |

0.0x

2.0x

4.0x

6.0x

Debt/

EBITDA

Senior Debt/

EBITDA

EBITDA/

Cash Interest

EBITDA -

Capex/

Cash Interest

2013 2014 2015 2016 2017

4.9x2017:

FINANCING MARKET OVERVIEW – RESTAURANTS AND RETAIL6

9

RESTAURANTS


QUARTERLY RESTAURANT TRANSACTIONS (U.S. & CANADA)

LOAN VOLUMECREDIT STATISTICS

AVERAGE PRIMARY SPREADS AVERAGE SECONDARY SPREAD

SUMMARY M&A STATS4

$0

$2

$4

$6

$8

$10

$12

$14

4Q11 4Q12 4Q13 4Q14 4Q15 4Q16 4Q17

Institutional Pro Rata

Weighted Avg.

InstitutionalRevolving

(in billions)

L+0

L+100

L+200

L+300

L+400

L+500

L+600

L+700

4Q11 4Q12 4Q13 4Q14 4Q15 4Q16 4Q17

4.8x 4.0x 3.2x

Non-Private EquityPrivate Equity

L+0

L+100

L+200

L+300

L+400

L+500

L+600

2011 2012 2013 2014 2015 2016 2017

11

14 4 6 8

4

12 10

38

11 9 85 7 5 3

10 8 9

16

10

1114

15

22

11

18

816

14

17

1410 14

1717

11

13

5

10

27

11

1518

21

30

15

30

18 1922

28

23

18 19

2422

14

23

13

19

20

12

Q4

20

13

Q1

20

13

Q2

20

13

Q3

20

13

Q4

20

14

Q1

20

14

Q2

20

14

Q3

20

14

Q4

20

15

Q1

20

15

Q2

20

15

Q3

20

15

Q4

20

16

Q1

20

16

Q2

20

16

Q3

20

16

Q4

20

17

Q1

20

17

Q2

20

17

Q3

20

17

Q4

PAGE |

M&A TRANSACTION INFORMATION4,5

10

RESTAURANTS


NOTABLE ANNOUNCED TRANSACTIONS

RECENTLY CLOSED TRANSACTIONS

Sentinel Capital Partners

acquired Captain D’s Enterprises

from Centre Partners in

December 2017.

Captain D’s is a differentiated

seafood QSR concept with 530

locations across 21 states.

Approximately 300 of these

locations are company-owned

stores.

Bento Sushi was acquired by YO!

Sushi, an iconic Japanese

restaurant group in November

2017.

Bento Sushi is North America’s

second largest sushi brand with

over 600 company-owned

locations and 1,700 partner sites.

Bento Sushi operates both

standalone QSRs and kiosks in

supermarkets.

Centerplate, a portfolio

company of Olympus Partners,

was sold to Sodexo, a leading

foodservice operator in

December 2017.

Centerplate is a leading food

and hospitality provider to major

sports, entertainment, and

convention venues.

EV / LTMClosed Target Seller Buyer Sales EBITDA

12/28/2017 Cajun Funding Corp. (70 Restaurants) Cajun Funding Corp. Ampler Chicken LLC P

12/27/2017 Centerplate, Inc. Olympus Partners Sodexo SA P $675.0 0.68x

12/21/2017 Ruby Tuesday, Inc. - NRD Capital Management LLC P 312.4 0.34x 8.5x

12/18/2017 Captain D's Enterprises LLC - Sentinel Capital Partners LLC P

12/12/2017 Desert Island Restaurants LLC Desert Island Restaurants LLC RCSH Operations, Inc. 35.0

12/6/2017 The Wendy's Co. (2 Restaurants) The Wendy's Co. Meritage Hospitality Group, Inc. P

12/1/2017 CB Franchise Systems LLC - MTY Food Group, Inc. 24.6

12/1/2017 Swig Holdings LLC - Four Foods Group Holdings LLC

11/30/2017 Pickle Barrel Restaurant Ltd. - Cara Operations Ltd. 18.9

11/20/2017 Bento, Inc. - YO! Sushi Ltd.; Mayfair Equity Partners LLP P 88.2

11/13/2017 Mendocino Farms LLC - TPG Growth LLC; TPG Capital Advisors LLC P

11/13/2017 Original Philly Holdings, Inc. - Tyson Foods, Inc.

11/12/2017 Another Broken Egg of America LLC - The Beekman Group LLC P

11/7/2017 Trinity Capital LLC (57 Taco Bell Restaurants) Trinity Capital LLC OCAT LLC P P

11/6/2017 Ted's Bulletin Family Restaurant - Salis Holdings P

10/31/2017 HomeStyle Dining LLC - Fog Cutter Capital Group, Inc. 10.6

10/26/2017 Castlerock Group Holdings, Inc. - WOWIO, Inc. 2.5

10/11/2017 Uncle Julio's Corp. - Catterton Management Co. LLC P

10/10/2017 Foodler, Inc. - GrubHub, Inc.

9/29/2017 Dagwoods Sandwichs & Salads - MTY Food Group, Inc. 2.3

9/28/2017 Corporate Caterers, Inc. - Salt Creek Capital Management LLC P

9/20/2017 Tom+Chee Worldwide LLC - Gold Star Chili, Inc.

9/15/2017 Round Table Pizza, Inc. Round Table Development Co. Levine Leichtman Capital Partners, Inc. P

8/31/2017 First Watch Restaurants, Inc. - Advent International Corp. P

8/29/2017 Cafe Rio, Inc. - Freeman Spogli Management Co. LP P

8/29/2017 Ignite Restaurant Group, Inc. Ignite Restaurant Group, Inc. Landry's, Inc.; Fertitta Entertainment LLC 57.0

8/21/2017 Cyclone Anaya's - Heritage Restaurant Group LLC

8/7/2017 Garden Fresh Restaurant LLC - Perpetual Capital LLC P

7/18/2017 Panera Bread Co. - JAB Holdings BV; BDT Capital Partners LLC P 7,486.1 2.64x 17.8x

7/10/2017 Back Yard Burgers, Inc. - Axum Capital Partners LLC P

7/10/2017 Jim 'N Nick's Bar-B-Q, Inc. - Roark Capital Group, Inc. P

7/1/2017 MO' Bettahs Hawaiian Style Food - Four Foods Group Holdings LLC

6/29/2017 FSC Franchise Co. LLC - CapitalSpring LLC P 41.5

6/22/2017 MHD LLC - Freshii, Inc. 4.2

6/19/2017 Houston Canada, Inc. - MTY Food Group, Inc. 12.1

6/15/2017 Arby's Restaurant Group, Inc. (8 Restaurants) Arby's Restaurant Group, Inc. Irish Beef, Inc. P P

6/12/2017 Republic Foods, Inc. - Carrols Restaurant Group, Inc. P

6/9/2017 The Works Gourmet Burger Bistro Fresh Brands, Inc. (Canada) MTY Food Group, Inc. 5.8

6/6/2017 The Antler's Restaurant LLC - 4B's Restaurants, Inc.

6/1/2017 DavCo Restaurants LLC (140 Wendy's Restaurants) The Wendy's Co. NPC Quality Burgers, Inc. P 70.7 0.33x

5/22/2017 Pie Squared Holdings LLC - Cleveland Avenue LLC P

5/15/2017 Roasting Plant, Inc. (Michigan) - Roasting Plant Inc (Detroit) P

5/9/2017 JW Lee, Inc. - RCI Hospitality Holdings, Inc. 26.0

5/8/2017 Pizza Hut, Inc. (16 Pizza Hut Restaurants) Yum! Brands, Inc. PCF Restaurant Group, LLC P

5/8/2017 Les Restaurants Giorgio Amérique Ltée - MTY Food Group, Inc. 0.2

4/28/2017 Bloomin' Brands, Inc. (45 Outback Steakhouses) Bloomin' Brands, Inc. H.I.G. Capital LLC (Private Equity) P P

4/28/2017 Bob Evans Restaurants LLC Bob Evans Farms, Inc. Golden Gate Private Equity, Inc. P 615.0

4/28/2017 Guckenheimer Enterprises, Inc. - ISS A/S 222.8 0.67x

4/28/2017 MOOYAH Franchise LLC - Balmoral Funds LLC P P

4/25/2017 Checkers Drive-In Restaurants, Inc. - Oak Hill Capital Management LLC P 525.0

4/24/2017 Cheddar's Casual Cafe, Inc. - Darden Restaurants, Inc. P 780.0

4/24/2017 Premiere Food Service, Inc. - Creative Dining Services, Inc.

Franchise

Location

Sale

Private

Equity

Involvement

Enterprise

Value

($ in Millions)

Energy & Power

IndustrialsHealthcare & Life Sciences

Transportation & Logistics

Aerospace, Defense & Government

Services

Business Services

Building Products & Materials

Technology, Media & Telecom

Specialty Distribution

Consumer

PAGE |

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OUR FIRM

RESTAURANTS


11

PAGE |

HARRIS WILLIAMS & CO.

1. Bureau of Labor Statistics.

2. University of Michigan.

3. USDA Economic Research Service: Food Expenditures.

4. Factset.

5. Company Filings & Press Releases.

6. S&P.

SOURCES

RESTAURANTS


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