Rhône Capital’s $560 Million Acquisition of Fogo de Chão, Inc.

Jefferies LLC acted as financial advisor to Fogo de Chão. Davis Polk & Wardwell LLP and Weil, Gotshal & Manges LLP served as legal counsel to Fogo and its Board of Directors. J.P. Morgan Securities LLC served as financial advisor and Sullivan & Cromwell LLP served as legal advisor to Rhône. Credit Suisse and Wells Fargo Bank, National Association are providing financing for the transaction.

Fogo de Chão, Inc. (“Fogo” or the “Company”) (NASDAQ:FOGO) today announced an agreement to be acquired by investment entities affiliated with Rhône Capital (together with its affiliates, “Rhône”). Under the terms of the agreement, Rhône will acquire the Company in an all cash transaction valued at $560 million. The Company’s stockholders will receive $15.75 per share, representing a 25.5 percent premium to the closing share price of the Company’s shares on February 16, 2018.

The transaction is the result of a comprehensive strategic alternatives review process taken by the Company’s Board of Directors. The transaction has been unanimously approved by Fogo’s Board of Directors. Funds affiliated with Thomas H. Lee Partners, L.P. and certain of Fogo’s directors and executive officers, which collectively hold more than 60 percent of Fogo’s shares, have approved the transaction by written consent. The acquisition is expected to be completed during the second calendar quarter of 2018, subject to regulatory approvals and other customary closing conditions.

Fogo de Chão (fogo-dee-shown) is a leading Brazilian steakhouse, or churrascaria, which has specialized for nearly 40 years in fire-roasting high-quality meats utilizing the centuries-old Southern Brazilian cooking technique of churrasco. Fogo delivers a distinctive and authentic Brazilian dining experience through the combination of high-quality Brazilian cuisine and a differentiated service model known as espeto corrido (Portuguese for “continuous service”) delivered by gaucho chefs. Fogo offers its guests a tasting menu of a variety of meats including beef, lamb, pork and chicken, simply seasoned and carefully fire-roasted to expose their natural flavors, a gourmet Market Table with seasonal salads, soup and fresh vegetables, seafood, desserts, signature cocktails and an award-winning wine list. The first Fogo de Chão opened in Brazil in 1979. The Company currently operates 38 restaurants in the United States, 9 in Brazil, two joint venture restaurants in Mexico, and two joint venture restaurants in the Middle East (Jeddah, Saudi Arabia and Dubai).

With over 20 years of investing experience, Rhône is a global alternative investment management firm with more than $5 billion in assets under management.

Davis Polk is advising Fogo de Chão, Inc. with a team including John H. Butler (Picture) and Richard D. Truesdell Jr. and associates Matthew S. Bryant, Shanu Bajaj, Samuel F. Page and Michael Zhuoran Xu. Partner Michael Mollerus and associate Ariel David Siman are providing tax advice. Partner Kyoko Takahashi Lin is providing executive compensation advice. Partner Joseph P. Hadley is providing credit advice.

Sullivan & Cromwell LLP served as legal advisor to Rhône with a team including Richard A. Pollack.

Involved fees earner: John Butler – Davis Polk & Wardwell; Richard Truesdell Jr. – Davis Polk & Wardwell; Matthew Bryant – Davis Polk & Wardwell; Shanu Bajaj – Davis Polk & Wardwell; Samuel Page – Davis Polk & Wardwell; Michael Zhuoran Xu – Davis Polk & Wardwell; Michael Mollerus – Davis Polk & Wardwell; Ariel Siman – Davis Polk & Wardwell; Kyoko Takahashi Lin – Davis Polk & Wardwell; Joseph P. Hadley – Davis Polk & Wardwell; Richard Pollack – Sullivan & Cromwell;

Law Firms: Davis Polk & Wardwell; Sullivan & Cromwell;

Clients: Rhône Capital LLC; Fogo de Chão, Inc.;

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Author: Ambrogio Visconti