FAT Brands Inc. agrees to acquire Global Franchise Group for $ 442.5 million

0

Enter Wall Street with Street Insider Premium. Claim your 1-week free trial here.


Largest restaurant acquisition of 2021 include Round Table Pizza®, Great American Cookies®, Hot Dog on a Stick®, marble slab creamery®and pretzel maker®

System-wide combined sales of approximately $ 1.4 billion

LOS ANGELES, CA, June 28, 2021 (GLOBE NEWSWIRE) – LARGE (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (the “Company”) announced today that it has agreed to acquire Global Franchise Group, which franchises and operates a portfolio of five fast food concepts, Round Table Pizza, Great American Cookies, Hot Dog on a Stick, Marble Slab Creamery and Pretzelmaker, of Serruya Private Equity, Inc. and Lion Capital LLP, for $ 442.5 million in cash and stock.

The cash portion of the purchase price will be funded by the issuance of a new series of notes and cash. The Company will also issue to the sellers $ 25 million of common shares and $ 67.5 million of Series B cumulative preferred shares. The transaction is expected to close by the end of July 2021, subject to expiration or the termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

With the acquisition of GFG, FAT brands will have more than 2,000 franchise and company-owned restaurants around the world with combined annual system-wide sales of approximately $ 1.4 billion. Approximately 87% of GFG stores are located in the United States. Based on current projections and assumptions, including the realization of expected synergies and the return to pre-COVID restaurant sales, the acquisition is expected to potentially increase annual EBITDA from around $ 40 million to around 55 to 60 million. millions of dollars.

“This acquisition is a key strategic step for FAT brands. We have been strong buyers in recent years, seeking to add strong and growing restaurant brands to our portfolio. Now that the economy is emerging from COVID-19 and restaurants are recovering quickly, we are delighted to have entered into this agreement to incorporate a powerful restaurant franchise group with the support of Serruya Private Equity and Lion Capital, ”said Andy Wiederhorn, President and CEO. of FAT brands. “The five new restaurant concepts have been very resistant to the end of the pandemic and will complement our existing brands. In addition, we will acquire the manufacturing operations of GFG, which will provide greater efficiency and additional revenue opportunities for our business.

“This is truly a transformative deal for the two brands FAT and GFG. Andy has an exciting vision for FAT Brands and through his recent acquisitions he has been able to create brand synergies within the portfolio while maintaining a lean business model, ”said Michael Serruya, Managing Director of Serruya Private Equity and chairman of the board of directors. by GFG. “I look forward to our continued involvement with GFG through our business support to FAT Brands from a strategic and equity perspective. “

Lyndon Lea, Managing Partner of Lion Capital, added, “We are extremely grateful to the leadership team at GFG, for their relentless focus on building a great company and culture, while successfully moving through a unprecedented period in the midst of COVID-19. We wish FAT Brands and GFG the best in the next phase of their journey.

Duff & Phelps Securities, LLC served as financial advisor to GFG and Serruya Private Equity. Sheppard, Mullin, Richter & Hampton LLP and Greenberg Traurig, LLP acted as legal counsel for FAT brands. Bryan Cave Leighton Paisner LLP acted as legal counsel to Serruya Private Equity and Lion capital.

About FAT brands (Fresh. Authentic. Tasty.)

FAT Brands (NASDAQ: FAT) is a leading global franchise company that strategically acquires, markets and develops fast and casual food concepts around the world. The company currently owns nine restaurant brands: Fatburger, Johnny Rockets, Buffalo’s Cafe, Buffalo’s Express, Hurricane Grill & Wings, Elevation Burger, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises approximately 700 units worldwide. For more information, please visit www.fatbrands.com.

About Global franchise group, SARL

Global Franchise Group, LLC is a strategic brand management company whose mission is to champion franchise brands and the people who build them. The company creates great brands that connect people with coveted products and memorable experiences. GFG currently supports more than 1,400 franchise and corporate stores in 16 countries through five fast food concepts: Round Table Pizza, Great American Cookies, Hot Dog on a Stick, Marble Slab Creamery and Pretzelmaker. Global Franchise Group, LLC is a subsidiary of Serruya Private Equity, Inc. and Lion Capital LLP.

Forward-looking statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the ability of FAT Brands Inc. (the “Company” or “our”) to complete the acquisition of Global Franchise Group. (“GFG”), the financial performance and future growth of the Company following the acquisition of GFG, including the Company’s EBITDA and system-wide sales following the acquisition, and the capacity of the Company to pursue future accretive and successful acquisitions. Forward-looking statements reflect the Company’s expectations for the future and are subject to significant business, economic and competitive risks, uncertainties and contingencies, including, but not limited to, the Company’s ability to integrate and successfully exploit the synergies of the acquisition, the Company’s ability to grow and grow revenue and earnings after the acquisition, and the uncertainties surrounding the severity, duration and effects of the COVID-19 pandemic. These risks, uncertainties and contingencies are difficult to predict and beyond our control, and could cause our actual results to differ materially from those expressed or implied in these forward-looking statements. We refer you to the documents that we file from time to time with the Securities and Exchange Commission, including our reports on Forms 10-K, 10-Q and 8-K, for a discussion of these risks, uncertainties and contingencies. We assume no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date of this press release.

About Not in accordance with GAAP Projected Financial measures

This press release includes projections of future EBITDA, a financial measure that is not prepared in accordance with US generally accepted accounting principles (“GAAP”). EBITDA is defined as net profit (loss), before interest charges, tax expense (benefit), depreciation and amortization. EBITDA is not a measure of the financial performance of the Company under GAAP and should not be viewed in isolation or as an alternative to net income (loss) as a measure of financial performance, cash flow related to operating activities as a measure of liquidity, or other derived performance measure in accordance with GAAP. The Company believes that EBITDA is an important additional measure of its operational performance, as it eliminates the impact of expenses that are not related to business performance. The Company also believes that this non-GAAP measure is useful to investors as it and similar measures are frequently used by securities analysts, investors and other interested parties to value companies in our industry and to provide information. additional growth rates on a more comparable basis than would be provided without such adjustments.

The Company has prepared the information included in this press release on the basis of the information available and the assumptions and estimates that it considers reasonable. The Company cannot guarantee that its estimates and assumptions will prove to be correct. In addition, to the extent that non-GAAP forward-looking financial measures are provided, they are presented on a non-GAAP basis without reconciling these forward-looking non-GAAP financial measures due to the inherent difficulty in forecasting and quantifying. certain amounts that are necessary for such reconciliation.

####

Contacts
Media Relations:
JConnelly
Erin mandzik
[email protected]
862-246-9911

Investor Relations:
RIC
Lynne Collier
[email protected]
646-430-2216

Share.

About Author

Comments are closed.