FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT
Brands” or the “Company”) announced today that it has agreed to
acquire Fazoli’s, an Italian chain known for its freshly prepared
pasta, Submarinos® sandwiches and unlimited signature breadsticks,
for $130 million from funds under management by Sentinel Capital
Partners. This acquisition brings to FAT Brands the largest premium
QSR Italian chain in the U.S., 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 further
speaks to FAT Brands’ recent diversification of their restaurant
portfolio, making a foray into the Italian quick-service dining
category. With over 200 stores currently open and a development
pipeline of 100 units over the next several years, the purchase of
Fazoli’s will increase FAT Brands’ footprint to 2,300 franchised
and corporate-owned stores around the world, bringing 2022 expected
systemwide sales at FAT Brands to more than $2.1 billion. The
addition of Fazoli’s, including the new stores due to open and
under development, is expected to increase the Company’s post-COVID
normalized EBITDA by approximately $14.5 to $15 million in
2022.
“Fazoli’s has a great growth story, in
particular, over the last year. They continue to surpass sales
expectations across the board,” said FAT Brands
CEO Andy Wiederhorn. “We have been eyeing this category for some
time; however, we were waiting for the right brand – one that is
high-growth, with almost all restaurants having drive-thru access,
in addition to, the synergies that we will achieve adding Fazoli’s
to our portfolio of brands. We look forward to building off of the
success of Sentinel Capital Partners.”
“We have had an outstanding year and we couldn’t
be more pleased to join forces with FAT Brands, a company that has
the same growth-oriented mentality as us 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 a part
of FAT Brands.”
For FAT Brands, Duff & Phelps Securities,
LLC served as financial advisor and Foley & Lardner LLP acted
as legal counsel. For Sentinel Capital Partners, North Point
Mergers and Acquisitions Inc. served as financial advisor and
Winthrop & Weinstine, P.A. acted as legal counsel.
###
About FAT (Fresh. Authentic. Tasty.) Brands
FAT Brands (NASDAQ: FAT) is a leading global
franchising company that strategically acquires, markets and
develops fast casual, casual and polished casual dining restaurant
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 over 2,100 units worldwide.
For more information on FAT Brands, please
visit www.fatbrands.com.
About Fazoli’s
Founded in 1988 in Lexington, KY, Fazoli's owns
and operates nearly 220 restaurants in 28 states, making it the
largest premium QSR Italian chain in America. Fazoli's prides
itself on serving premium quality Italian food, fast, fresh and
friendly. Menu offerings include freshly prepared pasta entrees,
Submarinos® sandwiches, salads, pizza and desserts – along with its
unlimited signature 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 ability of
the Company to complete the acquisition of Fazoli’s and open new
stores under development, the future financial performance and
growth of the Company following the acquisition of Fazoli’s,
including expectations of the Company’s EBITDA, unit volumes and
system-wide sales following the acquisition, and the Company’s
ability to conduct future accretive and successful acquisitions.
Forward-looking statements reflect the Company’s expectations
concerning the future and are subject to significant business,
economic and competitive risks, uncertainties and contingencies
including, but not limited to, the Company’s ability to
successfully integrate and exploit the synergies of the acquisition
of Fazoli’s, the Company’s ability to grow and expand revenues and
earnings following the acquisition, and uncertainties surrounding
the severity, duration and effects of the COVID-19 pandemic. These
risks, uncertainties and contingencies are difficult to predict and
beyond our control, and could cause our actual results to differ
materially from those expressed or implied in such 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 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 statement to
reflect events or circumstances occurring after the date of this
press release.
About Non-GAAP Projected Financial Measures
This press release includes projections of
future EBITDA, a financial measure that is not prepared in
accordance with U.S. generally accepted accounting principles
(“GAAP”). EBITDA is defined as net income (loss), before interest
expense, income tax expense (benefit), depreciation and
amortization expense. EBITDA is not a measurement 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 flows 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 because
it eliminates the impact of expenses that do not relate to business
performance. The Company also believes that 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
provide additional information regarding growth rates on a more
comparable basis than would be provided without such
adjustments.
The Company prepared the information included in
this press release based upon available information and assumptions
and estimates that it believes are reasonable. The Company cannot
assure you that its estimates and assumptions will prove to be
accurate. Additionally, to the extent that forward-looking non-GAAP
financial measures are provided, they are presented on a non-GAAP
basis without reconciliations of such forward-looking non-GAAP
financial measures due to the inherent difficulty in forecasting
and quantifying certain amounts that are necessary for such
reconciliation.
MEDIA
CONTACT: Erin
Mandzik, JConnellyemandzik@jconnelly.com 862-246-9911
INVESTOR RELATIONS:Lynne Collier,
ICRIR-FATBrands@icrinc.com646-430-2216
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