2 companies look at buying Ignite Restaurant Group

Two companies are reportedly in the running to acquire Houston-based Ignite Restaurant Group, the distressed operator of Joe’s Crab Shack and Brick House Tavern + Tap.

Market intelligence firm Debtwire identified Houston-based Landry’s and Nashville-based American Blue Ribbon Holdings as prospective buyers, citing unnamed sources. Neither company could be reached for comment.

Landry’s, owned by Tilman Fertitta, operates more than 50 brands including Landry’s, McCormick & Schmick’s and Morton’s The Steakhouse. American Blue Ribbon Holdings operates brands including Bakers Square, O’Charley’s and Ninety Nine Bakers Square.

“They both have experience with concepts like these,” Debtwire analyst Danielle Randall said. “In terms of value, it would be synergistic.”

In early April, Ignite announced it was considering options including a sale of the company. Last month, it reportedly considered filing

for bankruptcy.

The potential sale would follow years of declining foot traffic. Ignite has posted four consecutive annual losses. In 2015, it sold its Macaroni Grill brand for $8 million.

In 2016, the company closed 18 Joe’s Crab Shack locations and one Brick House Tavern + Tap. Those chains logged respective same-store sales declines of 7.3 percent and 7.7 percent during that period, according to securities filings.

Other signs of distress emerged last year, when the Nasdaq delisted Ignite after its market value closed below the minimum required for trading.

Landry’s knows the Joe’s Crab Shack brand. In 2006, it sold the chain to Ignite through a private equity firm that paid $192 million.

Ignite, saddled with about $121 million in debt, could make a decision on the sale by Tuesday, when its latest forbearance extension expires. It is also considering debt-for-equity swap with lenders, Debtwire reported.