Simpson Thacher is representing funds affiliated with Hill Path Capital in a $150 million preferred equity investment in The ONE Group Hospitality, Inc. (NASDAQ: STKS) (“The ONE Group”) in connection with The ONE Group’s announced acquisition of Safflower Holdings Corp., the owner of Benihana Inc. (“Benihana”), in an all-cash transaction, which is subject to customary closing conditions. The transaction, valued at $365 million, will be financed with preferred equity and a portion of a new $390 million term loan and credit facility. The ONE Group has also agreed to issue Hill Path Capital warrants to purchase up to (i) 1,000,000 shares of its common stock and (ii) 5% of the fully diluted shares of its common stock at closing.
The ONE Group is an international restaurant company that develops and operates upscale and polished casual restaurants and lounges including restaurant brands STK, Kona Grill and ONE Hospitality. Upon closing of the transaction, which is expected by the end of the second quarter of 2024, The ONE Group will have a global footprint of 168 venues, across full-service entertainment and grill restaurants across its four distinctive experiential, and complementary brands.
Benihana is a leading operator of highly differentiated experiential brands that owns the only national teppanyaki brand in the U.S. and RA Sushi. Currently Benihana operates 88 company-owned restaurants and franchises or licenses an additional 17 venues in the Americas.
The Simpson Thacher team includes Ben Heriaud, Ignacio Perez, Ellen Gao and Robert Bloomer (Alternative Capital); Matt Rogers and David Kim (M&A); Jen Albrecht and Michael Ratay (Banking and Credit) and Russell Light and Shareef Salfity (Tax).