Dive Brief:
- Corner Bakery accepted a $15 million bid from SSCP Restaurant Investors that was proposed during an auction last week, according to court documents.
- SSCP outbid stalking horse bidder Wexford Capital, which originally proposed buying the chain for $12 million.
- SSCP currently operates 80 Applebee’s restaurants and 43 Sonic restaurants, and is the parent company of Cici’s Pizza and Roy’s, according to its website.
Dive Insight:
SSCP has experience buying chains out of bankruptcy. Affiliate SSCP Management bought Cici’s in 2021 alongside Gala Capital Partners. SSCP also acquired Corner Bakery’s credit facility at the end of January after each of Corner Bakery’s lenders transferred the rights under the credit facility, according to court documents.
After SSCP reviewed financial and business information, it informed Corner Bakery of possible additional events of default. SSCP eventually informed the company that it intended to foreclose on Corner Bakery’s assets. This “discord with SSCP,” along with Corner Bakery’s ailing financial condition, led Corner Bakery to file for Chapter 11 bankruptcy protections in February.
Corner Bakery’s financials suffered during the pandemic when it saw “sharp declines in earnings and revenue,” CEO and COO Jignesh Pandya said in a court filing. Office closures were particularly troublesome as the company was heavily reliant on catering for workplaces in addition to breakfast and lunch business from commuters. Even before the pandemic, the company was facing declines in average unit volumes, which led the company to hire restructuring and financial advisors to consider strategic alternatives.
In 2020, Pandya Restaurant Growth Brands bought the company, which then focused on various initiatives, including menu development and improving the guest experience, Pandya said. This led to an increase in annual sales of 100%, he said.
