• by Karlene Lukovitz  @KLmarketdaily, May 12, 2010

NASDAQ-listed Rubio's Restaurants, Inc., owner of the Rubio's Fresh Mexican Grill fast-casual chain, is going private through a cash merger transaction valued at $91 million, or $8.70 per share.

Under the agreement, Greenwich, Conn.-based private equity firm Mill Road Capital LP, which currently owns 4.9% of Rubio's outstanding shares, will acquire all outstanding shares. The company's founder, Ralph Rubio, its president/CEO Dan Pittard and Rosewood Capital, who collectively own 24% of outstanding shares, have committed to voting in favor of the proposed merger.

If the deal is approved by shareholders and regulatory agencies, it will close during this year's third quarter.

The Rubio's deal is the most recent in a spate of acquisitions by private equity firms as the food service industry's prospects improve.

Other announced deals in recent weeks have included Oak Hill Capital Partners' agreement to buy Texas-based Dave & Buster's, Tavistock Group's acquisition of Fuddruckers Inc., Apollo Management's acquisition of CKE Restaurants, Lee Equity Partners' acquisition of Papa Murphy's, a Golden Gate Capital affiliate's acquisition of On the Border, and Roark Capital Group's acquisition of Wingstop Restaurants, Inc.

The Carlsbad, Calif.-headquartered Rubio's chain, founded in 1983, currently has 180 locations in California, Arizona, Utah and Colorado. In addition to its signature fish tacos (more than 50 million sold since its opening), the chain offers a variety of Mexican fare, all using fresh ingredients.

In 2009, Rubio's reported a record $188.9 million in revenues, up 5% over 2008, and net income of $392,000, or $0.04 per share, versus $84,000, or $0.01 per share in 2008.

In this year's first quarter, the chain saw same-store sales decline 1.8%, which it attributed to the recession and poor weather in California. However, its revenues rose 1% (to $46.7 million) and net income rose to $367,000, or $0.04 per share, versus $245,000 or $0.02 per share in Q1 2008.

"Mill Road Capital's desire to add Rubio's to its portfolio underscores our strategy within fast casual, which continues to be the fastest-growing segment of the restaurant industry," commented Pittard.

Mill Road's $27.9 million bid to acquire Arizona-based Kona Grill Inc. last year was ultimately rejected as too low.