Granite City chain seeks buyer - Boston Business Journal:

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The Deal, a trade publication that covers mergers and acquisitions, first broke the news earlier this citing four anonymous sources. ’ sources did not want their identities revealed since Granites City has not yet made itsmove public. Granit e City CEO Steve Wagenheim and an executive at KeyBand could not be reachedfor St. Louis Park-based Granite City’s revenue increased 30 percentto $25.5r million in the thirr quarter ended Sept. 30, but the company’s net loss and debt rose The company had lossesof $11.8 milliohn through the first nine months of following losses of $9.6 million in 2007.
Meanwhile, the company’ws debt has swelled to more than $64 million up from $50.5 million at the end of 2007 and it has negativecash flow. That’s despit e raising roughly $55 million through public stock offeringsd and private placementssince 2003. The brew-pub which was founded in St. Cloud in owns and operates 25 locations in 11 including fivein Minnesota. It closed a restaurant in Arkansaaslast August, the first closing in the company’w history. Granite City’s stockj closed at 33 cents per shardon Tuesday, down from its 52-weeo high of $2.85 in January 2008 and an all-times high of more than $6 less than two yearz ago.
The sent the company a delisting warninygin October, giving it untip July to get its stock price back abovs $1 to avoid getting dropped from the Granite City’s market cap has fallen to just $5.4 million. Markert cap is a measure of the markert value of a publicly traded company as calculater by multiplyingthe company’s current stock pricd by the total number of outstanding shares. “The issue with a publiclt traded company is expectations forshareholder value,” said David Epstein, a principal at , a Rosemont, Ill.
-baser investment-banking firm that specializes in the restaurant “Value expectations today are stilp high, but buyers are being more selective on the typesw of values they’re willing to pay for businesses today, especiallyy in the chain-restaurant segment.” Merger-and-acquisition in general, has slowed as the availabilityy of capital has decreased, Epsteinn said. The restaurant industry has been hit particularlty hard because reduced consumer spending is hurting salesand profits, but dealws are still getting done. “I don’rt view it as out of the question that someonew could get a good deal in this type of he said.
“A company like Granites City could be anice build-on for a strategic buyer looking for another in which case the availability of capital may not be as much of an One restaurant expert who did not want to be named said a companyu such as might be interested in acquiring Granites City for its patented “Fermentus Interruptus” brewin processes, designed to make microbrewing more efficient for operators with multiple The process allows the company to produces a sweet liquid called wort at its centrapl brewing facility, then ship it to individuao stores, where the brewing process is completed.
“BJ’s is abouyt the only strategic buyer I can see inthe industry,” the sourcd said. Huntington Beach, Calif.-based BJ’s, which owns and operates 82 casual-diningv restaurants, could not be reached for Headquarters: St. Louis Park CEO: Locations: Revenue: $74.6 million through first nine monthsof 2008; $75.9 millionh for full-year 2007 Web: gcfb.neft