Einstein Noah Goes Private

Einstein Noah Restaurant Group, Inc. (NASDAQ:BAGL), a leader in the fast-casual segment of the restaurant industry operating under the Einstein Bros.® Bagels, Noah’s New York Bagels®, and Manhattan Bagel® brands and JAB Holding Company (“JAB”) today announced a definitive agreement under which an affiliate of JAB will acquire Einstein Noah Restaurant Group for $20.25 per share in cash, or a total diluted equity value of approximately $374 million.

The agreement, which has been unanimously approved by Einstein Noah Restaurant Group’s directors, represents a premium of approximately 47 percent over Einstein Noah Restaurant Group’s 30-day average trading price.

“Einstein Noah Restaurant Group has a great collection of brands that reflect JAB’s long-term investment philosophy and we see significant opportunity for growth,” said Olivier Goudet, Partner and CEO of JAB. “We welcome Einstein Noah Restaurant Group and its employees to the JAB family, and we are excited to be a part of the next chapter of its growth.”

“Greenlight supports this transaction, which we believe delivers significant value to Einstein Noah Restaurant Group stockholders and is a win-win for all parties,” said David Einhorn, founder and president of Greenlight Capital, Einstein Noah Restaurant Group’s largest stockholder. “For more than a decade, we have worked closely with the Einstein Noah Restaurant Group to execute a turnaround plan, reducing debt and expanding its store footprint. JAB is an experienced firm that will lead Einstein Noah Restaurant Group into its next phase of growth.”

At the close of the transaction, Einstein Noah Restaurant Group will maintain its headquarters in Lakewood, Colorado and will continue to operate as a standalone business in the JAB portfolio, consistent with the firm’s investment practice. Michael Tattersfield, Chief Executive Officer of Caribou Coffee Company, Inc., another JAB portfolio company, will serve as Chairman of the Board.

“I am looking forward to working with the Einstein Noah Restaurant Group’s talented executive team. Having worked in and around the food industry for many years, I have long admired the Einstein Noah Restaurant Group’s strong market position and growth potential, and I am looking forward to contributing to the company’s continued success,” said Mr. Tattersfield.

“Through this transaction with JAB, which has a long and distinguished track record of investing in premium consumer companies, we will not only realize significant immediate value for our stockholders, but will continue to revitalize our brand, enhance our nationwide footprint and solidify our position as the leader in the fresh-baked bagels industry,” said Nelson Heumann, Chairman of the Board of Einstein Noah Restaurant Group. “Over the past few years, our dedicated employees have helped enhance our strong and growing brand leadership, and with JAB’s backing, we expect to build upon our success and position as a category leader.”

Under the terms of the merger agreement, an affiliate of JAB will promptly commence a tender offer to acquire all of the outstanding shares of Einstein Noah Restaurant Group’s common stock at a price of $20.25 per share in cash. Greenlight Capital, Einstein Noah Restaurant Group’s largest stockholder with more than 35% of the outstanding common shares, has agreed to tender its shares in support of the transaction. Following the successful completion of the tender offer, JAB will acquire all remaining shares not tendered in the offer through a second-step merger at the same price as in the tender offer.

The consummation of the tender offer is subject to various conditions, including a minimum tender of at least a majority of Einstein Noah Restaurant Group’s outstanding shares on a fully diluted basis, the expiration or termination of the waiting periods under applicable competition laws, and other customary conditions. The tender offer is not subject to a financing condition.

BDT Capital Partners, a Chicago-based merchant bank that provides long-term private capital solutions to closely held companies, is a minority investor in this transaction alongside JAB. In addition to BDTCP’s capital investment, BDT & Company, LLC, served as a financial co-advisor to JAB with Citigroup Global Markets Inc. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor to JAB in this transaction. Stifel is serving as financial advisor to Einstein Noah Restaurant Group in connection with this transaction and Alston & Bird LLP is acting as Einstein Noah Restaurant Group’s legal advisor.

September 29, 2014