Chanticleer Holdings, the Charlotte-based investment company that operates Hooters restaurants, said Wednesday that it plans to acquire American Roadside Burgers.
In the deal, Chanticleer will issue 740,000 shares of its common stock to shareholders in Charlotte-based Roadside. Chanticleer shares closed at $4.75 Wednesday.
Chanticleer said it has signed a nonbinding letter of intent to acquire the privately held hamburger chain that opened in 2006 and comprises five restaurants: two in Charlotte, in uptown and SouthPark; the original location in Smithtown, N.Y.; and one each in Columbia and Greenville, S.C.
Mike Pruitt, CEO of Chanticleer, said he’s gotten to know Rich LaVecchia, the owner of Roadside Burgers, over the past six months.
“I really appreciated what he’s done with American Roadside to date,” Pruitt said.
Pruitt and LaVecchia described the deal as being done on friendly terms. Sometimes, when private equity firms buy companies, the takeovers can be viewed as hostile.
Tom Lewison, who serves as a director for Roadside Burgers, is expected to join Chanticleer’s board and help provide strategies for both companies. Lewison is former chief operating officer of Charlotte-based fried-chicken chain Bojangles’.
“To have the opportunity to be involved with him in this concept is something that we were just incredibly excited to do,” Pruitt said, calling Lewison “arguably one of the better restaurant executives in the country.”
LaVecchia will step down and Lewison will help find a new CEO for Roadside Burgers, Pruitt said.
It’s unclear in what markets Chanticleer might expand Roadside Burgers. Pruitt would only say Wednesday that Chanticleer’s strategy is “to open one good store at a time.”
LaVecchia, who became chairman and CEO in 2011 and oversaw the relocation of the headquarters to Charlotte, said the city and its suburbs could support five Roadside Burgers. The Southeast, he said, is “one of the best growth markets and best business environments in the country.”
“I’m not saying that Chanticleer’s plans are going to limit the growth to the Southeast, but we only have four stores in the Southeast and one in Long Island (N.Y.), so there’s still a great opportunity to get into the primary markets in our initial footprint and them expand beyond that.”
Roadside Burgers has roughly 200 shareholders, he said.
Chanticleer has a minority ownership in Hooters of America, an operator and franchisor of roughly 430 Hooters in 28 countries. Chanticleer operates six Hooters in South Africa, Australia and Hungary. According to the company, it also owns exclusive franchise rights to develop and operate Hooters in parts of Brazil.
Chanticleer raised $11.2 million in 2012 to expand the Hooters brand internationally.
Wednesday’s deal needs approval from Chanticleer’s board and regulators. Closing is expected to be finalized by Sept. 30.