Wingstop Inc. Completes Recapitalization
OREANDA-NEWS. January 31, 2018. Wingstop Inc. (NASDAQ:WING) (the “Company” or “Wingstop”) today announced that its Board of Directors has approved a special cash dividend of $3.17 per share to stockholders in conjunction with the Company closing on a new $250 million senior secured credit facility. The special cash dividend represents approximately 7% of Wingstop’s total market capitalization. The new senior secured credit facility replaces the existing June 2016 senior secured credit facility.
Wingstop’s new 5-year credit facility bears an initial interest rate of LIBOR + 275 bps and consists of a $100 million senior secured term loan with a 5% mandatory amortization and a $150 million senior secured revolving credit facility. The interest rate is subject to a grid with step downs of 25 basis points as leverage declines.
Following payment of the special dividend, Wingstop will have drawn approximately $230 million on the new credit facility, including the full amount of the term loan facility and $130 million of the revolving facility, to refinance $133.8 million of outstanding indebtedness under Wingstop’s June 2016 credit facility and pay the special dividend.
The special cash dividend will be paid on February 14, 2018 to stockholders of record as of February 9, 2018. Wingstop’s common stock will begin trading on an ex-dividend basis on February 8, 2018. Stockholders who sell their shares prior to the February 8, 2018 ex-dividend date will also be selling their right to receive the special dividend.
While the tax treatment of the special dividend cannot be concluded with certainty in 2019, the Company expects approximately 65% - 75% of the special dividend will be treated by stockholders as a return of capital, with the remaining 25% - 35% treated as a dividend. Stockholders are encouraged to consult with their financial and tax advisors regarding circumstances of their individual situation.
Wells Fargo Securities, LLC, Citizens Bank, National Association, and Fifth Third Bank acted as the joint lead arrangers and book runners of the senior secured credit facility.
Founded in 1994 and headquartered in Dallas, Texas, Wingstop Inc. (NASDAQ:WING) operates and franchises more than 1,100 restaurants across the United States, Mexico, Singapore, the Philippines, Indonesia, the United Arab Emirates, Malaysia, Saudi Arabia, and Colombia. The Wing Experts’ menu features classic and boneless wings with 11 bold, distinctive flavors including Original Hot, Cajun, Atomic, Mild, Teriyaki, Lemon Pepper, Hawaiian, Garlic Parmesan, Hickory Smoked BBQ, Louisiana Rub, and Mango Habanero. Wingstop’s wings are always cooked to order, hand-sauced and tossed and served with a variety of house-made sides including fresh-cut, seasoned fries. Having grown its domestic same store sales for 14 consecutive years, the Company has been ranked #3 on the “Top 100 Fastest Growing Restaurant Chains” by Nation’s Restaurant News (2016), #7 on the “Top 40 Fast Casual Chains” by Restaurant Business (2016), and was named “Best Franchise Deal in North America” by QSR magazine (2014). Wingstop was ranked #88 on Fortune’s 100 Best Medium Workplaces list in October 2016.