FAT Brands Inc. to acquire restaurant chain Fazoli for $130 million

FAT Brands Inc. to acquire restaurant chain Fazoli for $130 million

Premium quick-service chain marks FAT Brands debut in Italian restaurant category

Los Angeles, CA (RestaurantNews.com) FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) today announced that it has agreed to acquire Fazoli’s, an Italian chain known for its freshly made pasta, Submarinos® sandwiches and unlimited signature breadsticks, for $130 million from funds under management by Sentinel Capital Partners. The acquisition brings FAT Brands the largest upscale Italian QSR chain in the United States and will be funded with cash from the issuance of new notes from the company’s securitization facilities. The transaction is expected to close by mid-December 2021.

The planned acquisition of Fazoli’s demonstrates FAT Brands’ recent diversification of its restaurant portfolio, making a foray into the Italian quick service restaurant category. With more than 200 stores currently open and a development pipeline of 100 units over the next few years, the purchase of Fazoli’s will increase FAT Brands’ footprint to 2,300 franchised and company-owned stores globally, increasing the system-wide sales forecast for 2022 at FAT Brands at more than $2.1 billion. The addition of Fazoli’s, including new stores slated to open and under development, is expected to increase the company’s post-COVID normalized EBITDA by approximately $14.5-15 million in 2022.

“Fazoli’s has experienced excellent growth, especially over the past year. They continue to exceed sales expectations in all areas,” said FAT brands CEO Andy Wiederhorn. “We have been looking at this category for some time; However, we were expecting the right brand, a high growth brand, with almost all restaurants having drive-thru access, in addition to the synergies we will achieve by adding Fazoli’s to our brand portfolio. We look forward to building on the success of Sentinel Capital Partners. »

“We’ve had a stellar year and couldn’t be happier to partner with FAT Brands, a company that has the same growth-driven mindset as we do at Fazoli’s,” said Carl Howard, CEO of Fazoli’s. “From co-branding to virtual kitchens to menu development opportunities, we see great value in being part of FAT Brands.”

For FAT Brands, Duff & Phelps Securities, LLC acted as financial advisor and Foley & Lardner LLP acted as legal advisor. For Sentinel Capital Partners, North Point Mergers and Acquisitions Inc. served as financial advisor and Winthrop & Weinstine, PA acted as legal advisor.

About FAT Marks (Fresh. Authentic. Tasty.)

FAT Brands (NASDAQ: FAT) is a leading global franchise company that strategically acquires, markets and develops casual, casual and fine dining fast food concepts around the world. The company currently owns 15 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises of over 2,100 units worldwide. For more information on FAT marks, please visit fatbrands.com.

About Fazoli

Founded in 1988 in Lexington, KY, Fazoli owns and operates nearly 220 restaurants in 28 states, making it the largest upscale QSR Italian chain in America. Fazoli’s prides itself on serving premium Italian cuisine that is fast, fresh and friendly. Menu offerings include freshly made pasta entrees, Submarinos® sandwiches, salads, pizzas and desserts – as well as its signature all-you-can-eat breadsticks.

Forward-looking statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the Company’s ability to complete the acquisition of Fazoli’s and to open new stores under development, the future financial performance and growth of the Company after the acquisition of Fazoli’s, including expectations regarding the Company’s EBITDA, unit volumes and system-wide sales after the acquisition, and the ability to the Company to make future accretive and successful acquisitions. Forward-looking statements reflect the Company’s expectations regarding the future and are subject to important business, economic and competitive risks, uncertainties and contingencies, including, but not limited to, the Company’s ability to integrate and successfully exploit the synergies of the acquisition of Fazoli’s, the Company’s ability to grow and increase its revenues and earnings following the acquisition, and the uncertainties surrounding the severity, duration and effects of the pandemic COVID-19. These risks, uncertainties and contingencies are difficult to predict and are beyond our control, and could cause our actual results to differ materially from those expressed or implied by these forward-looking statements. We refer you to the documents we file from time to time with the Securities and Exchange Commission, such as our reports on Form 10-K, Form 10-Q and Form 8-K, for a discussion of these risks and other risks and uncertainties that could cause our actual results to differ materially from our current expectations and from the forward-looking statements contained in this press release. We undertake no obligation to update any forward-looking statements to reflect events or circumstances that occur after the date of this press release.

About Projected Non-GAAP Financial Measures

This press release includes projections of future EBITDA, a financial measure that is not prepared in accordance with United States generally accepted accounting principles (“GAAP”). EBITDA is defined as net profit (net loss), before interest expense, income tax expense (benefit), depreciation and amortization expense. EBITDA is not a measure of the Company’s financial performance under GAAP and should not be considered in isolation or as an alternative to net income (loss) as a measure of financial performance, cash flow from operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. The Company believes that EBITDA is an important supplemental measure of its operating performance as it removes the impact of expenses that are not related to business performance. The Company also believes this non-GAAP measure is useful to investors because it and similar measures are frequently used by securities analysts, investors and other interested parties to evaluate companies in our industry and to provide information information about growth rates on a more comparable basis than would be provided without such adjustments.

The Company has prepared the information contained in this press release based on available information and assumptions and estimates it deems reasonable. The Company cannot guarantee that its estimates and assumptions will prove to be correct. In addition, to the extent that non-GAAP forward-looking financial measures are provided, they are presented on a non-GAAP basis without reconciliations of such non-GAAP forward-looking financial measures due to the inherent difficulty in predicting and quantifying. certain amounts that are necessary for such a reconciliation.

Media Contact:
Erin Mandzik, JConnelly
[email protected]
862-246-9911

Investor Relations:
Lynne Collier, ICR
[email protected]
646-430-2216

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