LOS ANGELES -- Private equity firm Golden Gate Capital is buying California Pizza Kitchen Inc. for about $470 million, three months after the restaurant chain put itself up for sale.
The $18.50-per-share cash bid is an 11 percent premium to the restaurant chain's $16.71 closing stock Tuesday. Shares of California Pizza Kitchen gained $1.66, or 9.9 percent, to $18.37 in morning trading on Wednesday. Over the past year, the company's stock has traded between $12.95 and $20.
California Pizza Kitchen, which got its start in 1985, serves pizzas, pastas, soups, sandwiches and other food items. It has 265 restaurants, with 205 company-run and 60 under franchise or license agreements.
California Pizza Kitchen began exploring a potential sale of the company in February. The Los Angeles company's board unanimously approved the deal and recommends stockholders tender their shares in the tender offer.
"Golden Gate Capital is a leading investor in the restaurant industry, with a proven track record as a value-added partner to its portfolio companies, and we believe that its significant commitment and experience in the sector will benefit all of our stakeholders," co-CEOs and co-Chairmen Rick Rosenfield and Larry Flax said in a statement.
Golden Gate's other restaurant buyouts include the purchase of On the Border last year. And last month Lawson Software Inc. agreed to a $2 billion acquisition offer from Golden Gate and Infor.
An affiliate of Golden Gate will start a tender offer for all of California Pizza Kitchen's outstanding shares by June 8. The acquisition is expected to close in the third quarter.