Business Combination (Tables)

12 Months Ended

Jan. 03, 2017

Summary of Merger Consideration Paid to DTH Stockholders (except for the Levy Newco Parties)

The following summarizes the merger consideration paid to DTH stockholders (except for the Levy Newco Parties) (in thousands):



	Calculation of Purchase Price
Cash consideration paid ⁽¹⁾	$	105,164
Value of share consideration issued ⁽²⁾	69,305
Fair value of equity interests acquired in Step 1 ⁽³⁾	120,000
Less: Transaction expenses paid by the Company ⁽¹⁾	(10,164		)
Total purchase price	$	284,305

(1)

Each issued and outstanding share of DTH stock held by DTH stockholders other than the Levy Newco Parties was converted into the right to receive the per share merger consideration, which equaled $38.84 per DTH share, payable in cash and the Company’s common stock. Cash consideration was paid with respect to all common stock of DTH except for shares held by the Levy Newco Parties. The aggregate amount of cash consideration paid directly to DTH stockholders was $95 million. Total cash consideration paid also included $10.2 million of expenses paid by the Company for the closing of Step 2.

(2)

The stock merger consideration consisted of the Company’s common stock issued to DTH stockholders as part of the merger consideration in exchange for shares of DTH common stock. Company shares exchanged for the DTH shares held by the Levy Newco Parties are discussed in (3) below. The following summarizes the number of shares of the Company’s common stock issued to DTH stockholders other than the Levy Newco Parties:



(in thousands, except share and per share data)	Calculation of Share Consideration
Number of shares issued	4,553,540
Value per share as of June 30, 2015	$	15.22
Value of share consideration transferred	$	69,305

(3)

The Company exchanged its common stock for DTH shares held by the Levy Newco Parties acquired in Step 1. The Transactions were accounted for as related events transferring control of DTH to the Company through a minority investment in Step 1 and a controlling interest in Step 2. The Levy Newco Parties’ shares of DTH common stock were exchanged for shares of the Company’s common stock in the Business Combination, but represent a previously held equity interest in an acquired company. The previously held equity interest had the same value as its $120 million purchase price.

Schedule of Preliminary Allocation of Purchase Price to Tangible and Identifiable Intangible Assets Acquired and Liabilities Assumed Based on Fair Value

The Company recorded an allocation of the purchase price to DTH’s tangible and identifiable intangible assets acquired and liabilities assumed based on their fair value as of the Closing Date. The final purchase price allocation is as follows (in thousands):



	Purchase Price Allocation
Cash and cash equivalents	$	5,173
Accounts receivable and other receivables	3,228
Inventories	2,541
Prepaid expenses and other current assets	4,266
Total current assets	15,208
Property and equipment	105,524
Intangible assets	250,490
Other assets	4,194
Total identifiable assets acquired	375,416
Accounts payable	(18,866		)
Other accrued liabilities	(26,607		)
Current portion of capital lease obligations and deemed landlord financing liabilities	(1,670		)
Long-term debt, capital lease obligations and deemed landlord financing liabilities	(246,562		)
Deferred income taxes	(80,254		)
Other long-term liabilities	(36,208		)
Net identifiable liabilities assumed	(34,751		)
Goodwill	319,056
Total gross consideration	$	284,305

Schedule of Preliminary Values Allocated to Intangible Assets and Useful Lives

The final values allocated to intangible assets and the useful lives are as follows (in thousands):



	Fair Value			Useful life
Favorable lease assets and other intangible assets	$	14,290		0.6 to 19 years
Trademarks	220,300			Indefinite
Franchise agreements	15,900			0.1 to 40 years
Total intangible assets	$	250,490
Unfavorable lease liabilities ⁽¹⁾	$	(23,652	)	1.5 to 19 years
Weighted average life of definite-lived intangibles				11 years


(1)	Included in other non-current liabilities on the consolidated balance sheets.

Schedule of Unaudited Pro Forma Condensed Consolidated Financial Information

The unaudited pro forma consolidated financial information has been prepared using the acquisition method of accounting in accordance with U.S. GAAP (in thousands):



	52 Weeks Ended December 29, 2015 (pro forma)			52 Weeks Ended December 30, 2014 (pro forma)
	(unaudited)
Total Revenue	$	424,002		$	396,024
Net loss	$	(137	)	$	(10,780	)