On Tuesday, BurgerFi and special purpose acquisition company OPES Acquisition announced the completion of a $100 million merger that will introduce the emerging fast-casual as a public company.
The anticipated enterprise value is $143 million, or 2.4x BurgerFi’s estimated revenue in 2021 and 13.6x the brand’s estimated adjusted EBITDA in 2021. Under the agreement, Opes and BurgerFi will become a combined entity, with BurgerFi’s shareholders rolling over a majority of the equity in the public company. The restaurant will receive more than $40 million to be used for corporate expansion.
Most of BurgerFi management will continue running the company. Meanwhile, BurgerFi and OPES will select a new CEO and Ophir Sternberg, CEO of OPES, will become executive chairman. The company will be officially named BurgerFi International and trade under the symbol BFI. The transaction is expected to close in Q3.
The first BurgerFi unit opened February 2011 in Fort Lauderdale, Florida. By 2014, the brand had opened 50 locations. Now, the company includes a total of 130 stores—105 franchises and 25 company-run stores. The restaurant earned $146 in systemwide sales in 2019 and has systemwide AUVs of $1.41 million. Adjusted EBITDA in 2019 was $3.3 million and same-store sales rose 2.4 percent.
“We believe the combination with OPES will allow BurgerFi to reach new heights as we continue to redefine the way the world eats burgers,” BurgerFi President Charlie Guzzetta said in a statement. “The OPES team’s capital market experience and real estate expertise, in combination with our existing framework for excellence in everything we do—from procurement, to operations, and our high-performing teams—will accelerate our expansion opportunities and significantly enhance our go-to-market plan.”
Leveraging the merger, BurgerFi is accelerating its growth strategy. The company will open 59 units in 2021—30 corporate units and 29 franchises—boosting the company’s systemwide footprint to 189.
BurgerFi expects annual sales to drop roughly $33 million to $112.5 million this year, but grow to $161 million in 2021. It also foresees adjusted EBITDA reaching $4.3 million in 2020 and increasing to $10.5 million in 2021.
Major pillars of BurgerFi’s growth strategy include an emphasis on nontraditional locations and delivery-only business.
Regarding off-premises, BurgerFi signed a license agreement with REEF Technology in April, which led to the launch of BurgerFi’s first ghost kitchen on June 15 in Miami. REEF plans to open 25 BurgerFi ghost kitchens by the end of 2021, with new market expansion in Los Angeles, Seattle, Chicago, Houston, Nashville, and Minneapolis.
“Tapping into these ghost kitchens through our partnership with REEF will allow us to utilize existing infrastructure to create new growth opportunities while building brand recognition and integrity,” Guzzetta said.
The brand said there’s also significant whitespace for premiere nontraditional relationships. BurgerFi targets airports, transportation hubs, travel plazas, college campuses, military bases, and sporting venues.
When explaining the potential of nontraditional locations, the company pointed toward its relationship with HMSHost, which operates in 120 airports nationwide. Sales at BurgerFi’s Ft. Lauderdale-Hollywood International airport store has exceeded $3 million in annual sales, despite not being in a well-suited spot inside the venue. Leadership believes there’s potential for more than $5 million in sales with a prime airport location.
In addition, BurgerFi is continuing its partnership with Aramark to open locations at the University of South Florida, a mall in Portland, Oregon, a transportation hub in Philadelphia, and an entertainment center in Virginia, and partnering with the U.S. Air Force to open in military bases across Arizona, Colorado, Alaska, Georgia, and Nebraska.
The chain uses 100 percent natural Angus beef with no steroids, antibiotics, growth hormones, chemicals or additives, and was one of only two restaurant brands (Shake Shack) to receive an “A” rating in a 2018 report called "Chain Reaction IV: Burger Edition," which was produced by the Center for Food Safety, Consumer Reports, Food Animal Concerns Trust, U.S. PIRG Education Fund, Friends of the Earth, and Natural Resources Defense Council.