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Case Study: Restaurant and Entertainment Centers

Financial Advisory

Company: $200 million company, operating 40 theme restaurant and entertainment venues in major cities across North America

Situation/ Tasks Performed: The company had been growing rapidly and using leverage from the landlords to finance leasehold improvements in anticipation of an IPO. When the IPO market closed down, the company was left without the cash flow to service its debt. TRG analyzed the company's cash flow as a function of various sales scenarios, valued the business and analyzed breakeven by location. TRG also investigated opportunities to increase cash flow and de-lever the enterprise as well as analyzing the unsecured creditors' position. Recommendations were made to sell non-strategic locations to generate cash that could be reinvested in physical improvements and marketing of the remaining locations to preserve enterprise value.

Results: TRG's work gave the lender, management and the equity sponsors the framework to negotiate the restructuring of the credit facilities.

Nature of Assignment:
Primary: Financial Advisory

Industry: Food Service; Hospitality