Fat Brands Acquires Fazoli’s Restaurants in $130 Million Deal
(Bloomberg) -- Fat Brands Inc. is acquiring restaurant chain Fazoli’s from Sentinel Capital Partners in a $130 million deal.
The transaction is expected to close by mid-December, according to a statement.
Fazoli’s is the fourth acquisition by Fat Brands since September 2020. The company announced last month that it had closed a $300 million acquisition of Twin Peaks, a Dallas, Texas-based sports bar chain. It also bought Johnny Rockets burger restaurants last year and Global Franchise Group in July.
Sentinel Capital, a previous owner of TGI Friday’s, bought Fazoli’s in 2015 from Sun Capital for an undisclosed price, according to Fazoli’s website.
Fazoli’s, one of a few Italian quick-service restaurant companies, has a lot of growth ahead of it, said Fat Brands Chief Executive Officer Andy Wiederhorn.
Founded in 1988 and based in Lexington, Kentucky, Fazoli’s has more than 200 locations. It plans to open an additional 100 in the next several years, Wiederhorn said.
The new locations are expected to increase its post-Covid normalized earnings before interest, taxes, depreciation and amortization by about $14.5 million to $15 million in 2022, according to the statement.
Over 70% of Fazoli’s sales come from delivery and drive-through customers, Wiederhorn added.
Duff & Phelps Securities advised Fat Brands on the transaction, while North Point Mergers and Acquisitions advised Sentinel Capital.
Shares of Fat Brands, based in Beverly Hills, California, have jumped 86% this year, compared with a 23% in the S&P 500 Index.
Wiederhorn said Fat Brands may have more acquisitions to announce before the end of the year. “I expect that we’re going to have a very busy fourth quarter,” he said.
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