BurgerFi announced Monday that it will purchase casual-dining concept Anthony’s Coal Fired Pizza & Wings for $161.3 million.
As part of the agreement, the burger brand will acquire Anthony’s 61 company-run restaurants spread across Florida, Pennsylvania, Delaware, Maryland, New Jersey, New York, Rhode Island, and Massachusetts. The chain is headquartered in Fort Lauderdale, Florida, which is a little more than an hour away from BurgerFi’s home base of Palm Beach.
The 116-unit burger concept will buy Anthony’s from L Catterton, a private equity firm with majority investments in Uncle Julio’s and Primanti Bros, and minority stakes in Chopt, Hopdoddy Burger Bar, and Noodles & Company. Past investments include Bloomin’ Brands, P.F. Chang’s, Edible, Cheddar’s Scratch Kitchen, Baja Fresh Mexican Grill, First Watch, and Caribou Coffee.
When the deal closes, BurgerFi will assume $74.7 million in debt from Anthony's, and L Catteron will receive nearly $87 million in stock and become one of the burger chain's largest shareholders.
“The willingness of a well-respected PE firm in the restaurant business like L Catterton to invest in BurgerFi is a testament to our growth potential. This combined entity will help fuel our aggressive growth plans for BurgerFi,” said BurgerFi CEO Julio Ramirez in a statement. “Our aim is to work with innovative and forward-thinking teams and brands that align with BurgerFi’s goals and vision as we continue to expand and strengthen our platform in the restaurant industry.”
Anthony’s is centered around a 900-degree coal fired oven, and offers “well done” pizza, coal fired chicken wings, meatballs, handcrafted sandwiches, and salads. In November 2020, the chain launched virtual concept The Roasted Wings, which focuses on the chain’s wings in multiple flavors. The restaurant is primarily based in suburban strip centers with an average size of 3,200 square feet. Pre-COVID, Anthony's earned an average unit volume of $2.3 million and a restaurant-level operating margin of 19 percent, and from 2011 to 2019, it grew revenue at a compound annual growth rate of 12 percent.
This year, the pizza and wings concept launched a new fast-casual format built with a smaller footprint and streamlined operating model. The prototype is expected to bring growth opportunities for both corporate and franchised expansion.
“Anthony’s represents a fantastic addition to the BurgerFi family. It is a well-positioned, pizza and wing concept with industry-leading average unit volumes and strong profitability,” said Anthony’s CEO Ian Baines in a statement. “BurgerFi is a very dynamic growth brand, and I am honored to work with their talented team as we continue to pursue and expand on our growth strategy.”
Ramirez will remain CEO and president of BurgerFi while Baines will become CEO of the combined company. Anthony's CFO Patrick Renna will become president of the pizza and wings chain. The acquisition is scheduled to close in Q4.
BurgerFi’s expansion comes almost a year after the chain made its debut on Wall Street in December. Instead of an IPO, the brand merged with OPES Acquisition Corp., a special purpose acquisition company.
The brand’s goal this year is to open 25 to 30 company-run and franchise restaurants. In the second quarter, BurgerFi debuted three company-run stores and one franchise unit, increasing the year-to-date total to eight outlets. As of mid-August, the concept had more than 25 signed leases, 18 of which were under various stages of construction and development. Ramirez estimated that the chain will end with the opening of 14 corporate locations and roughly 11 franchise units in 2021.
Ghost kitchens are BurgerFi’s other lever of growth. The company has more than 25 operating in the U.S. in partnership with REEF Kitchens and Epic Kitchens. Fifteen to 20 more are projected to debut by the end of the year. The delivery-only locations have fueled BurgerFi’s digital sales, which rose to $17.3 million in Q2, a 12 percent lift year-over-year. The channel mixed 39 percent in the quarter.
Ophir Sternberg, executive chairman of BurgerFi, said the purchase will be the brand's "first acquisition in building a premium multibrand platform."
“We are well positioned to continue the growth of our existing BurgerFi brand and leverage our scale to unlock value from strategic acquisitions,” Sternberg said in a statement. “We are looking forward to expanding our portfolio in the food industry and to the new chapters this will bring to both BurgerFi and Anthony’s Coal Fired Pizza & Wings.”