FAT Brands to acquire Hurricane Grill and Wings
FAT Brands Inc. has signed a deal to acquire Hurricane Grill & Wings for $12.5 million. The acquisition, which will be funded with cash on hand and third-party financing, is expected to close in 2017, according to a company press release. Hurricane has more than 60 casual dining locations and recently launched afast casualbrand, an opportunity that Fat Brands CEO Andy Wiederhorn hopes to capitalize on.
"Their new fast casual brand Hurricane BTW (burgers, tacos and wings) has a significant franchise development pipeline and will nicely diversify the company into more fast casual venues," he said in a company press release.
Wiederhorn, who is keynoting the 2018 Restaurant Franchising and Innovation Summit, July 16-18 in London, said based on the company's expected free cash flow in 2018, he expects to pay an "annualized dividend of $0.48 per common share starting in 2018, subject to the declaration and approval by the board of directors, which represents an implied yield of approximately 5 percent based on the current share price."
Pro forma for the acquisition and expected synergies from the combined companies, the company expects its annualized revenue to exceed $17 million and annualized adjusted cash earnings to exceed $11 million, or $1.10 per common share based on 10 million shares outstanding.
The acquisition comes on the heels of two other major growth announcements by FAT Brands, parent company of Fat Burger, Buffalo's Cafe and Buffalo's Express brands. The chain in October purchased Ponderosa and Bonanza steakhouses for $10.5 million and filed in August to take the company public.
The combined company's franchisees will operate approximately 350 restaurants around the globe, with system-wide sales exceeding $360 million.
Hurricane Grill & Wings President & CEO John Metz said joining FAT Brands will make Hurricane Grill & Wings and Hurricane BTW significantly more competitive in today's landscape.
"We believe that this transaction will enable us to leverage FAT Brands' proven expertise and realize our global growth potential," he said in the release.
Topics: Franchising & Growth