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Fat Brands to acquire Fazoli’s Italian chain for $130M

Third brand purchase this year gives Fat Brands system sales of $2.1B, 2,300 stores

Fat Brands agreed to acquire the Fazoli’s Italian chain for $130M in cash from a Sentinel Capital Partners fund. With the acquisition of the largest quick-service Italian chain in the United States, the Fat Brands portfolio of company and franchised restaurants under its brands now totals 2,300 stores with system sales of $2.1B. The Los Angeles-based restaurant company will issue new notes under its securitization facilities.

The acquisition of fast-casual Fazoli’s is the third by Fat Brands just this year. It acquired Global Franchising Group in July and announced the acquisition of the Twin Peaks sports-bar chain in September.

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Fat Brands, the parent of several restaurant chains, including Fatburger, Elevation Burger, Yalla Mediterranean, and Johnny Rockets, indicated that the purchase of Fazoli’s would add about $14.5 to $15M of post-COVID normalized EBITDA in 2022. This takes into account profit from stores that are currently open and those slated to open from the development pipeline.

“Fazoli’s has a great growth story, in particular, over the last year. They continue to surpass sales expectations across the board,” said Andy Wiederhorn, Fat Brands chief executive. “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.”

Duff & Phelps Securities, LLC served as financial advisor for Fat Brands, while Foley & Lardner LLP provided legal counsel. Sentinel Capital Partners had the benefit of North Point Mergers and Acquisitions Inc. as financial advisor and Winthrop & Weinstine, P.A. as legal counsel.

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“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 Fazoli’s CEO Carl Howard. “From co-branding to virtual kitchens to menu development opportunities, we see great value in being a part of Fat Brands.”

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