FAT (Fresh. Authentic. Tasty.) Brands Inc. 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,” says 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.