FAT Brands Completes Acquisition of Global Franchise Group
July 22 2021 - 11:30AM
FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT
Brands” or the “Company”) today announced the completion of its
acquisition of Global Franchise Group for $442.5 million from
Serruya Private Equity and Lion Capital. As a result of the
acquisition, FAT Brands has gained five new restaurant concepts –
Round Table Pizza®, Great American Cookies®, Hot Dog on a Stick®,
Marble Slab Creamery® and Pretzelmaker®. The transaction is the
largest acquisition by a restaurant franchisor to date in 2021, and
was funded with cash and stock, including $350 million in cash from
newly issued notes and cash on hand, $67.5 million in Series B
preferred stock and $25 million in common stock.
The acquisition of Global Franchise Group marks
an important milestone for FAT Brands, increasing the Company’s
portfolio from approximately 700 units to more than 2,000 units
worldwide. Based on current projections and assumptions, including
realization of expected synergies and return to pre-COVID
restaurant sales, the acquisition is expected to increase FAT
Brands’ annual EBITDA by approximately $40 million to $55-$60
million, and increase the Company’s annual revenues from
approximately $36 million to over $100 million. In addition to
adding five new restaurant concepts, the acquisition included a
manufacturing facility in Atlanta, GA that supports various Global
Franchise Group brands and provides incremental revenue
opportunities.
“This acquisition is our largest deal yet, and
further diversifies our iconic restaurant portfolio into new
restaurant segments and categories. As our acquisitions have grown
from small chains to global restaurants, FAT Brands is poised to
better position itself as a multi-concept operator in the franchise
restaurant business,” said FAT Brands CEO Andy
Wiederhorn. “Serruya Private Equity and Lion Capital were excellent
partners in bringing this transaction to completion. Serruya has
been a longtime supporter of our vision and we are grateful to be
working with partners who share our enthusiasm for this diverse
market.”
FAT Brands’ other notable acquisitions include
Johnny Rockets in 2020 and Elevation Burger in 2019. FAT Brands’
acquisition strategy has been a pillar of the Company’s ethos since
its launch in 2017 and remains a top priority for management
throughout the rest of the year and beyond.
For more information on FAT Brands, visit www.fatbrands.com.
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About FAT (Fresh. Authentic. Tasty.) Brands
FAT Brands (NASDAQ: FAT) is a leading global
franchising company that strategically acquires, markets and
develops fast casual and casual dining restaurant 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,
LLC
Global Franchise Group, LLC is a strategic brand
management company with a mission of championing franchise brands
and the people who build them. The company builds great brands that
connect people with craveable products and memorable experiences.
GFG currently supports more than 1,400 franchised and corporate
stores in 16 countries across five quick service restaurant
concepts: Round Table Pizza, Great American Cookies, Hot Dog on a
Stick, Marble Slab Creamery and Pretzelmaker. Global Franchise
Group, LLC is an affiliate 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 future
financial performance and growth of FAT Brands following the
acquisition of Global Franchise Group, including estimates of
annual EBITDA and annual revenues following the acquisition, and
the Company’s ability to conduct future accretive and successful
acquisitions. Forward-looking statements reflect the Company’s
expectations concerning 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 successfully integrate and exploit the synergies of the
acquisition, the Company’s ability to grow and expand revenues and
earnings following the acquisition, and 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 such 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 Form 10-K, Form 10-Q and Form 8-K, for a discussion of
these and other risks, uncertainties and contingencies. We
undertake no obligation to update any forward-looking statement to
reflect events or circumstances occurring after the date of this
press release.
About Non-GAAP Projected Financial
Measures
This press release includes projections of
future EBITDA, a financial measure that is not prepared in
accordance with U.S. generally accepted accounting principles
(“GAAP”). EBITDA is defined as net income (loss), before interest
expense, income tax expense (benefit), depreciation and
amortization expense. EBITDA is not a measurement of the Company’s
financial performance under GAAP, and should not be considered in
isolation or as an alternative to net income (loss) as a measure of
financial performance, cash flows from operating activities as a
measure of liquidity, or any other performance measure derived in
accordance with GAAP. The Company believes that EBITDA is an
important supplemental measure of its operating performance because
it eliminates the impact of expenses that do not relate to business
performance. The Company also believes that this non-GAAP measure
is useful to investors because it and similar measures are
frequently used by securities analysts, investors and other
interested parties to evaluate companies in our industry and
provide additional information regarding growth rates on a more
comparable basis than would be provided without such
adjustments.
The Company prepared the information included in
this press release based upon available information and assumptions
and estimates that it believes are reasonable. The Company cannot
assure you that its estimates and assumptions will prove to be
accurate. Additionally, to the extent that forward-looking non-GAAP
financial measures are provided, they are presented on a non-GAAP
basis without reconciliations of such forward-looking non-GAAP
financial measures due to the inherent difficulty in forecasting
and quantifying certain amounts that are necessary for such
reconciliation.
MEDIA
CONTACT: Erin
Mandzik, JConnellyemandzik@jconnelly.com 862-246-9911
INVESTOR RELATIONS:Lynne
Collier, ICRIR-FATBrands@icrinc.com 646-430-2216
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