Lafayette businessman Seenu G. Kasturi has been quietly building Blue Victory Holdings over the past three years, mainly through the acquisition of restaurants and multi-family properties. Kasturi announced Aug. 15 that he had acquired controlling interest in American Restaurant Concepts Inc., the Jacksonville, Fla.-based operator and franchisor of Dick’s Wings & Grill restaurants.
Dick’s has 16 full-service restaurants and two express locations. Fifteen of the restaurants are in Florida, with one in Georgia and two in Canada.
Kasturi paid almost $500,000 for 15.5 million shares of American Restaurant’s stock, or 3.2 cents per share, and assumed $66,000 in operating expenses. The deal gives him 45.3 percent of American’s stock, which trades over the counter.
Kasturi is the president, chief executive officer and chairman of Blue Victory Holdings, an asset development firm focused primarily on the ownership and management of branded restaurants. The company owns and manages 16 Kentucky Fried Chicken stores, four Kentucky Fried Chicken/Taco Bell restaurants, one Kentucky Fried Chicken/Long John Silver’s restaurant and one Hardee’s location.
Additional holdings include Victory Village Apartments, Iberia Village Apartments, Village Park Apartments, Village Cove Apartments and Global Offshore Resources, an offshore staffing company. Kasturi says he is in the process of selling the multi-family component of the business to focus on development of the restaurant concepts.
Blue Victory’s assets will eventually be part of American Restaurants. “This makes it to where I have controlling interest or close to majority ownership in a publicly traded company,” he says. “There’s probably going to be a secondary offering,” he continues. “As we see the market conditions favorable, we are going to merge the components that we think will give us the best value for our shareholders.”
Established in 2009, the local company has grown from $1.5 million in revenues in 2010 to $12.2 million last year and expects its 2012 revenue to top $25 million. “Our goal is to get to $100 million in revenue over the next two to three years,” says Kasturi, a native of India who has lived in Lafayette more than three decades.
Before starting Blue Victory, he founded K&L Investment Realty, which focused on the ownership and management of restaurant and real estate properties. He is also a certified financial planner and was formerly an SEC-registered broker and investment adviser.
American Restaurant Concepts lost $1.65 million for the year ending Dec. 25 and has defaulted on $290,000 in loans, according to its annual report. The report noted that American’s current cash resources would not allow the company to continue operating for another year.
The 15.5 million shares being purchased by Kasturi represent approximately 45.3 percent of the company’s outstanding common stock. The purchase price of 3.2 cents per share being paid by Kasturi values American Restaurant at approximately $1.1 million. The company’s common stock closed at 2 cents per share Aug. 14.
Kasturi has already paid 40 percent of the purchase price to Michael Rosenberger, American Restaurant’s president, CEO and founder. The local businessman plans to expand the fast-casual concept, which has a NASCAR theme, into Louisiana after tweaking the menu to add a Cajun flair and assessing the overall operations.
Rosenberger retained ownership of 4,573,000 shares, or 13.3 percent, of the company’s common stock.
The deal is expected to close before the end of the year. According to SEC filings, six months after the closing date, Kasturi has the right to request that Rosenberger resign. “We want to evaluate all things related to this acquisition,” Kasturi says. “We have not made a decision. ... We want continuity, and we want to be able to develop our own relationships with the franchisees,” he continues. “Mike’s got an extensive amount of time into this concept and understands it better than anybody else, and it would be foolish of us to make drastic change immediately.”