FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (“FAT
Brands” or the “Company”) announced today that it has agreed to
acquire Twin Peaks, a chain of sports lodges known for scratch-made
food and signature 29° draft beers, from Garnett Station Partners
for $300 million. This acquisition brings to FAT Brands a
fast-growing, polished casual dining brand, and will be funded with
the proceeds of $250 million of new securitization notes and the
issuance to the sellers of shares of Series B preferred stock. The
transaction is expected to close by the end of September 2021.
The acquisition of Twin Peaks will expand the
FAT Brands portfolio from quick-service, fast casual and casual
dining concepts into the fast-growing segment of polished casual
dining. With 82 stores currently open, six additional stores due to
open by year-end 2021, and another 18 under development over the
next 18 months, the purchase of Twin Peaks is expected to bring FAT
Brands’ systemwide sales from approximately $1.4 billion to over
$1.8 billion across more than 2,100 franchised and corporate-owned
stores around the world. The addition of Twin Peaks, including the
new stores due to open and under development, is expected to
increase the Company’s post-COVID normalized EBITDA by
approximately $25 to $30 million.
“Twin Peaks is a noteworthy addition for FAT
Brands. Following the recent acquisitions of Johnny Rockets and
Global Franchise Group, this acquisition comes at a time when we’re
seeking to expand our market segments into sports and polished
casual dining,” said FAT Brands CEO Andy
Wiederhorn. “As a strong, growth-oriented concept, Twin Peaks
complements our existing brands. The average unit volumes between
$4.5 million and $6.5 million for new units is at the high end of
industry growth standards. The exceptional unit economics and
proven track record of the Twin Peaks brand has led to
extraordinary demand for new store openings from new and existing
franchisees. The current pipeline of new franchise locations as
well as the large potential for global expansion of this successful
brand is what brought us to the table and makes this a truly unique
acquisition for FAT Brands. We’re pleased to have the support of
Garnett Station Partners as we continue the expansion of Twin Peaks
into new markets.”
“The sale of Twin Peaks to FAT Brands marks a
major milestone for us after a year of consistent sales growth as
we work towards our vision of becoming a global-facing brand,” said
Joe Hummel, CEO of Twin Peaks. “FAT Brands has a proven track
record of scaling and introducing concepts to international
markets. We’re excited to be part of Andy’s vision as he continues
to build FAT Brands.”
Matt Perelman, Managing Partner at Garnett
Station Partners added: “Since our investment, Twin Peaks has
become one of the fastest growing sports-themed, bar-forward
concepts in the sector. We’re thankful for Andy’s partnership as we
move forward with this deal and are confident that Twin Peaks will
continue its success under FAT Brands.”
Duff & Phelps Securities, LLC served as
financial advisor and Kirkland & Ellis LLP acted as legal
counsel to Garnett Station Partners. Greenberg Traurig LLP acted as
legal counsel to FAT Brands Inc.
Conference Call and Webcast
FAT Brands will host a conference call and
webcast to discuss the acquisition on Thursday, September 2, at
8:30 AM ET. Hosting the conference call and webcast will be Andy
Wiederhorn, President and Chief Executive Officer, and Ken Kuick,
Chief Financial Officer.
The conference call can be accessed live over
the phone by dialing 1-877-705-6003, passcode 13722849. A replay
will be available after the call until Thursday, September 9, 2021,
and can be accessed by dialing 1-844-512-2921, passcode 13722849.
The webcast will be available at www.fatbrands.com under the
“Investors” section and will be archived on the site shortly after
the call has concluded.
###
About FAT (Fresh. Authentic. Tasty.)
Brands
FAT Brands (NASDAQ: FAT) is a leading global
franchising company that strategically acquires, markets and
develops fast casual and casual dining restaurant concepts around
the world. The Company currently owns 14 restaurant brands: Round
Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, 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 2,000 units worldwide. For more information on FAT Brands,
please visit www.fatbrands.com.
About Garnett Station
Partners
Garnett Station Partners is a principal
investment firm founded in 2013 by Matt Perelman and Alex Sloane
and has over $750 million of assets under management. Garnett
Station partners with experienced and entrepreneurial management
teams and strategic investors to build value for its portfolio of
growth platforms. The firm draws on its global relationships,
operational experience and rigorous diligence process to source,
underwrite and manage investments. Core sectors include food &
beverage, health & wellness, automotive and business services.
Garnett Station's culture is based on the principles of
entrepreneurship, collaboration, analytical rigor and
accountability. For more information, please visit
www.garnettstation.com.
About Twin Peaks
Founded in 2005 in the Dallas suburb of
Lewisville, Twin Peaks now has 82 locations in 25 states. Twin
Peaks is the ultimate sports lodge featuring made-from-scratch food
and the coldest beer in the business surrounded by scenic views and
the latest in high-definition TVs. At every Twin Peaks, guests are
immediately welcomed by a Twin Peaks team member and served up a
menu made for MVPs. From its smashed and seared to order burgers to
in-house smoked ribs and hand-breaded wings, guests can expect menu
items capable of satisfying every appetite. To learn more about
franchise opportunities, visit www.twinpeaksfranchise.com. For more
information, visit www.twinpeaksrestaurant.com.
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 Twin Peaks and open new
stores under development, the future financial performance and
growth of the Company following the acquisition of Twin Peaks,
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 Twin Peaks, 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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