FAT Brands To Acquire Global Franchise Group For $442.5M

FAT Brands Inc FAT inked an agreement to acquire Global Franchise Group from Serruya Private Equity Inc and Lion Capital LLP for $442.5 million in cash and stock.
Global Franchise franchises and operates five quick-service restaurant concepts, Round Table Pizza, Great American Cookies, Hot Dog on a Stick, Marble Slab Creamery, and Pretzelmaker.
The company will issue $25 million in common stock, $67.5 million in Series B cumulative preferred stock, and the cash portion will be funded from the issuance of a new series of notes and cash on hand.
The transaction is expected to close by the end of July 2021.
With the acquisition, FAT will have more than 2,000 franchised and company-owned restaurants worldwide with combined annual system-wide sales of approximately $1.4 billion.
The acquisition is expected to increase annual EBITDA by about $40 million to $55-$60 million.
“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,” said Andy Wiederhorn, Chief Executive Officer, FAT Brands.
FAT’s cash and equivalents totaled $4.5 million as of March 28, 2021.
Price action: FAT shares closed lower by 0.2% at $13.3 on Friday.