Creating Financing Options to Allow Management to Focus on Long-term Goals


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Business:

Round Table Pizza, Inc. (“RTP” or the “Company”) owns, operates and franchises a chain of 439 premium pizza restaurants throughout the Western region of the United States and 7 in Dubai (78 Company-owned locations and a total of 368 franchised locations worldwide).


Transaction:

Tapping into its extensive network, FocalPoint aligned RTP with a lender, Summit Partners, providing debt capital for its next phase of growth.


Challenges:

In the decade preceding the Great Recession, the Company enjoyed consistent profitable growth. In February 2007, RTP raised a $65 million credit facility to support further expansion. However, the onset of the Great Recession resulted in a curtailment of growth plans and the need to restructure both operations and its balance sheet. Management undertook major cost-savings initiatives to counter the impact of the Great Recession and negotiated amendments to its existing credit facility. When neither tactic proved sufficient, the Company explored a sale process. The prospective buyers were unable to secure the necessary financing and ultimately the Company filed for protection under Chapter 11. RTP emerged from bankruptcy in December 2011 with a consensual plan of reorganization that provided for 100% repayment to all creditors. Because RTP is 100% employee owned through an ESOP, there were also some structural challenges.


Solution:

Despite the concerns around the restaurant sector in general, the bankruptcy, and RTP’s ESOP structure, FocalPoint’s trusted relationships with lenders provided the credibility to position RTP as a sustainable differentiated concept with a strong management team. FocalPoint helped generate over a dozen financing proposals by focusing lenders on the strength and diversity of the royalty income from the franchise base, recent de-leveraging efforts, and emergence from bankruptcy with creditors achieving full reinstatement of obligations. In the end, the Company selected a structure that maximized cash flow after debt service and provided sufficient liquidity for operations. This option also gave the Company flexibility to execute on its strategic business plan and focus on long-term goals.

Round Table Pizza has raised debt capital from Summit Partners

FocalPoint served as exclusive financial advisors to Round Table Pizza, Inc.

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“This new credit facility provides us with the capital we need to execute our strategic business plan.”

Rob McCourt
CEO, Round Table

“We’ve accomplished our refinancing nine months ahead of schedule. We sought an advisor that not only had an understanding of the restaurant industry, but more importantly, that had deep experience in debt capital markets and was capable of providing our board with numerous options to refinance our existing indebtedness.”

Keith Davis
CFO, Round Table