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Mergers & Acquisitions

FAT Brands Hunts for More Deals

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Published: August 24th, 2021
The restaurant chain operator, which continued to strike deals during the pandemic, plans to make more acquisitions before the end of the year.

In the months that the pandemic brought much of the restaurant industry to a halt and slowed M&A, FAT Brands Inc. (FAT) was one of the few strategic buyers still making acquisitions last year.

The Fatburger owner in August 2020 bought ’50s diner-themed Johnny Rockets Inc. in a $25 million deal from an affiliate of private equity firm Sun Capital Partners Inc. which, after a series of challenges, was exiting from its restaurant investments.

“We’re buying great brands that will survive the test of time,” FAT Brands CEO Andy Wiederhorn told The Deal. “We are focused on the long term, not just what’s going on in the middle of the pandemic.”

As restaurants began rebounding earlier this year and M&A ticked up once again, FAT Brands followed up the Johnny Rockets deal with its largest acquisition to date in June. The company acquired Global Franchise Group, and its five quick-service brands including Round Table Pizza, Great American Cookies and Hot Dog on a Stick, in a $442.5 million cash-and-stock deal from private equity firms Serruya Private Equity Inc. and Lion Capital LLP.

“It’s a big acquisition — essentially triples us in size,” Wiederhorn said.

But according to the CEO, FAT Brands is only getting started. The Beverly Hills, Calif.-based company, which owns 13 franchise brands with about $1.2 billion in systemwide sales after the Global Franchise Group deal, plans to make more acquisitions before the end of the year.

While FAT Brands wants to grow the businesses it owns organically, it continues to be on the lookout for brands — particularly franchises that can round out its portfolio or build on the market segments the company is already in, Wiederhorn said.

FAT Brands merged with its controlling shareholder Fog Cutter Capital Group in December — a move that the company said in a statement will give it “increased financial flexibility and simplified corporate structure, at a time in the restaurant industry when committed capital and first mover advantage are critical to strategic acquisitions.”

Editor’s note: The original version of this article was published earlier on The Deal’s premium subscription website. For access, log in to TheDeal.com or use the form below to request a free trial.

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