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Fat Brands acquires Global Franchising Group for $442.5M

Parent of Johnny Rockets, Elevation Burger adds five brands to its portfolio

Fat Brands has agreed to acquire Global Franchising Group (GFG), the parent of QSR brands, including American Cookies, Marble Slab Creamery and Pretzelmaker, for $442.5M in cash and stock. The purchase of Global Franchising from Serruya Private Equity and Lion Capital, LLP will add five chains to Fat Brands’ portfolio.

Cash for the purchase was generated from a new series of notes issued and cash on hand. As part of the deal, Fat Brands will also issue $25M of common stock and $67.5M in Series B cumulative preferred stock to Serruya and Lion Capital.

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Fat Brands’ appetite for acquisitions is well-documented. The restaurant company, which is parent of Elevation Burger and Johnny Rockets, among other brands, will now franchise and operate more than 2,000 restaurants globally. Systemwide sales of the various chains will total $1.4B.

Fat Brands’ combination with GFG will produce an increase of $40M of annualized EBITDA for the combined company. A total of 88 percent of GFG locations are located within the United States, which will create additional growth opportunities internationally in the future.

Andy Wiederhorn, president and chief executive of FAT Brands, said, “This acquisition is a key strategic milestone for FAT Brands. We have been very acquisitive in recent years, seeking to add strong and growing restaurant brands to our portfolio. Now that the economy is emerging from COVID-19 and restaurants are rapidly recovering, we are pleased to have reached this agreement to incorporate a powerhouse restaurant franchising group with the support of Serruya Private Equity and Lion Capital.”

Across its quick-serve brands, including Round Table Pizza, Great American Cookies, Hot Dog on a Stick, Marble Slab Creamery and Pretzelmaker, GFG’s portfolio includes 1,400 stores in 16 countries. Fat Brands’ concepts include Fatburger, Johnny Rockets, Buffalo’s Cafe, Buffalo’s Express, Hurricane Grill & Wings, Elevation Burger, Yalla Mediterranean and the Ponderosa and Bonanza Steakhouses.

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Wiederhorn notes that what sweetened the deal was the perceived value of GFC’s manufacturing operations to Fat Brands, “providing greater efficiencies and incremental revenue opportunities.“

Post acquisition, the combined companies will produce EBITDA of $55M to $60M.

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