LOCO 8-K
El Pollo Loco Holdings, Inc. (LOCO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
CURRENT REPORT
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The |
Item 1.01 Entry into a Material Definitive Agreement.
On May 23, 2024, El Pollo Loco Holdings, Inc., a Delaware corporation (the “Company”), entered into a Stock Repurchase Agreement (the “Repurchase Agreement”) with FS Equity Partners V, L.P. and FS Affiliates V, L.P. (together, the “Sellers”), pursuant to which the Company agreed to purchase an aggregate of 1,534,303 shares of the Company’s common stock, par value $0.01 per share (“Common Stock”), from the Sellers at a price of $9.785 per share, representing the closing price of such shares as listed on Nasdaq on May 23, 2024, less a discount of five percent (5%), for a total purchase price of $15,013,154.86 (the “repurchase”). The repurchase was completed on May 29, 2024. The Company previously repurchased (i) 1,500,000 shares of Common Stock from the Sellers pursuant to a Stock Repurchase Agreement dated November 29, 2023 and (ii) 2,500,000 shares of Common Stock from the Sellers pursuant to a Stock Repurchase Agreement dated August 7, 2023, as previously reported on Current Reports on Form 8-K filed with the Securities and Exchange Commission on December 4, 2023 and August 8, 2023, respectively. John Roth, a former director of the Company until his resignation effective August 16, 2023, is a general partner and chief executive officer of Freeman Spogli & Co., which manages the Sellers.
The foregoing summary of the Repurchase Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Repurchase Agreement, which is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 8.01 Other Events.
Also on May 29, 2024, the Company terminated all obligations under its Income Tax Receivable Agreement, dated July 30, 2014, by and among the Company and Trimaran Pollo Partners, L.L.C. as the Existing Stockholders’ Representative (the “TRA”) with respect to any payments or obligations owed to the Sellers thereunder in exchange for a payment to the Sellers of $398,895.50. The TRA requires the Company to pay to its pre-initial public offering (“IPO”) stockholders 85% of the savings in cash that the Company realized in its income taxes as a result of utilizing its net operating losses and other tax attributes attributable to preceding periods.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit |
| Description |
99.1 | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Exhibit 99.1
STOCK REPURCHASE AGREEMENT
This STOCK REPURCHASE AGREEMENT (this “Agreement”) is made and entered into as of May 23, 2024, by and between El Pollo Loco Holdings, Inc., a Delaware corporation (the “Company”), FS Equity Partners V, L.P. (“Seller 1”) and FS Affiliates V, L.P. (“Seller 2” and together with Seller 1, “Sellers”).
W I T N E S S E T H:
WHEREAS, Sellers directly own an aggregate of 1,534,303 shares of the Company’s issued and outstanding common stock, par value $0.01 per share (the “Company Shares”) comprised of 1,514,051 Company Shares owned by Seller 1 and 20,252 Company Shares owned by Seller 2; and
WHEREAS, effective May 29, 2024, each Seller desires to sell to the Company, and the Company desires to purchase, free and clear of any and all Liens (as defined below) from Sellers an aggregate of 1,534,303 of such Company Shares (the “Purchased Shares”) (comprised of 1,514,051 Company Shares from Seller 1 and 20,252 Company Shares from Seller 2) for a per share purchase price equal to $9.785 (the “Per Share Purchase Price”), representing a five percent discount to the closing price of such Company Shares as listed on Nasdaq on May 23, 2024 (the “Stock Repurchase Transaction”).
WHEREAS, the parties hereto are concurrently executing and delivering that certain TRA Repurchase Agreement, dated as of even date herewith (the “TRA Repurchase Agreement”), pursuant to which each Seller shall agree to sell to the Company, and the Company shall agree to purchase from Sellers, all of such Seller’s interest in the Income Tax Receivable Agreement, dated as of July 30, 2014, between the Company and the parties named therein or their designated assigns or successors (as amended, supplemented or otherwise modified from time to time the “TRA”), such that the Company shall repurchase all of each Seller’s interest in the TRA concurrently with the consummation of the Stock Repurchase Transaction.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, agreements, representations and warranties contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
PURCHASE AND SALE; CLOSING
COVENANTS
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REPRESENTATIONS AND WARRANTIES OF SELLERS
Sellers hereby represent and warrant to the Company as follows:
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REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Sellers as follows:
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MISCELLANEOUS
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[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase Agreement to be duly executed, all as of the date first above written.
| EL POLLO LOCO HOLDINGS, INC. | |
| a Delaware corporation | |
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| By: | /s/ Elizabeth Williams |
| Name: | Elizabeth Williams |
| Title: | Chief Executive Officer |
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| Address: | 3535 Harbor Blvd., Suite 100 |
| | Costa Mesa, California 92626 |
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[Signature Page to Stock Purchase Agreement]
| SELLERS | |
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| FS EQUITY PARTNERS V, L.P., | |
| a Delaware Limited Partnership | |
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| By: | FS Capital Partners V, LLC, a Delaware Limited Liability Company |
| Its: | General Partner |
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| By: | /s/ John M. Roth |
| Name: | John M. Roth |
| Title: | Authorized Signatory |
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| FS AFFILIATES V, L.P., | |
| a Delaware Limited Partnership | |
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| By: | FS Capital Partners V, LLC, a Delaware Limited Liability Company |
| Its: | General Partner |
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| By: | /s/ John M. Roth |
| Name: | John M. Roth |
| Title: | Authorized Signatory |
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| Address: | 11100 Santa Monica Boulevard, Suite 1900 |
| | Los Angeles, California 90025 |
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[Signature Page to Stock Purchase Agreement]