FAT Brands has agreed to acquire brand management company Global Franchise Group (GFG) from Serruya Private Equity and Lion Capital in a $442.5m cash and stock deal.
GFG franchises and operates a quick-service restaurant (QSR) concepts portfolio which includes Round Table Pizza, Great American Cookies, Hot Dog on a Stick, Marble Slab Creamery and Pretzelmaker.
Nearly 87% of GFG’s stores are located in the US.
FAT Brands president and CEO Andy Wiederhorn 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.
“The five new restaurant concepts have been very resilient coming out of the pandemic and will complement our existing brands. Furthermore, we will acquire GFG’s manufacturing operations, which will provide greater efficiencies and incremental revenue opportunities to our company.”
FAT Brands will fund the cash portion of the acquisition by issuing a new series of notes and cash on hand. It will also issue $25m in common stock and $67.5m in Series B cumulative preferred stock to the sellers.
With this acquisition, it will have more than 2,000 franchised and company-owned restaurants across the globe, with combined annual system-wide sales of approximately $1.4bn.
Serruya Private Equity managing director and GFG board chairman Michael Serruya said: “This is truly a transformative deal for both FAT Brands and GFG. Andy has an exciting vision for FAT Brands and through his recent acquisitions, he has been able to create brand synergies within the portfolio while maintaining an asset-light business model.”
Completion of the deal is subject to expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and is expected to take place next month.
Last September, FAT Brands completed the acquisition of restaurant chain Johnny Rockets from an affiliate of private equity firm Sun Capital Partners for approximately $25m.