Operations

FAT Brands acquiring GFG Brands in $442M deal

Photo: iStock.

June 28, 2021

Marking the largest restaurant acquisition of 2021, FAT Brands is buying Global Franchise Group — the parent company of Round Table Pizza, Great American Cookies, Hot Dog on a Stick, Marble Slab Creamery and Pretzelmaker — in a $442.5 million deal with Serruya Private Equity Inc. and Lion Capital LLP.

"This acquisition is a key strategic milestone for FAT Brands," FAT Brands CEO and President Andy Wiederhorn said in a company press release. "We have been very acquisitive 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 rapidly recovering, we are pleased to have reached this agreement to incorporate a powerhouse restaurant franchising group with the support of Serruya Private Equity and Lion Capital."

"The five new restaurant concepts have been very resilient coming out of the pandemic and will complement our existing brands. Furthermore, we will acquire GFG's manufacturing operations, which will provide greater efficiencies and incremental revenue opportunities to our company."

With the acquisition of GFG, FAT Brands will have more than 2,000 franchised and company-owned restaurants around the world with combined annual system-wide sales of about $1.4 billion. Nearly 90% of GFG's stores are in the U.S., and based on current projections, Wiederhorn expects the acquisition to eventually increase annual EBITDA by approximately $40 million to about $55-$60 million.

"This is truly a transformative deal for both FAT Brands and GFG," Michael Serruya, managing director of Serruya Private Equity and GFG chairman, said in the release. "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 an asset-light business model."

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

FAT Brands owns Fatburger, Johnny Rockets, Buffalo's Cafe, Buffalo's Express, Hurricane Grill & Wings, Elevation Burger, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses.

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