Cava Group purchases Zoe’s Kitchen for $300 million

Zoe’s Kitchen Inc., a fast-casual restaurant group with 261 U.S. restaurant locations, has entered into a definitive agreement to be acquired in a transaction by privately held Cava Group Inc., a fast-growing Mediterranean culinary brand with 66 restaurants. The combined companies will have 327 restaurants in 24 states throughout the United States.

Under the terms of the agreement, Zoe’s Kitchen shareholders will receive $12.75 in cash for each share of common stock they hold. This represents a premium of approximately 33% to Zoe’s Kitchen’s closing share price on Aug. 16, 2018, and an enterprise value of approximately $300 million.

The acquisition will be financed through a significant equity investment in Cava led by Act III Holdings, the investment vehicle created by Ron Shaich, founder, chairman, and former CEO of Panera Bread, and funds advised by The Invus Group, with participation from existing investors SWaN & Legend Venture Partners and Revolution Growth.

After closing, Brett Schulman, current chief executive officer of Cava, will serve as chief executive officer of the combined company and will work closely with the existing leadership teams at Zoe’s Kitchen and Cava to oversee their growth and evolution. Shaich will serve as chairman of the combined company.

“Together, these two brands are united by a shared heritage and passion for exceptional Mediterranean cuisine,” said Schulman. “Now with the addition of Zoe’s Kitchen, we will be able to broaden our geographic footprint and meet the needs of even more guests—whether in Bethesda or Birmingham, Plano or Pasadena—who crave delicious, healthy food without compromise. As part of the Cava family, Zoe’s Kitchen will benefit from Cava’s track record of bold culinary innovation and leveraging data and technology to drive growth and convenience.”

The transaction is expected to close in the fourth quarter of 2018.