FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ:FAT) (the “Company”) today announced that it has agreed to acquire Global Franchise Group, which franchises and operates a portfolio of five quick service restaurant concepts, Round Table Pizza, Great American Cookies, Hot Dog on a Stick, Marble Slab Creamery and Pretzelmaker, from Serruya Private Equity, Inc. and Lion Capital LLP, for $442.5 million in cash and stock.
The cash portion of the purchase price will be funded from the issuance of a new series of notes and cash on hand. The Company will also issue to the sellers $25 million in common stock and $67.5 million in Series B cumulative preferred stock. The transaction is expected to close by the end of July 2021, subject to expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.
With the acquisition of GFG, FAT Brands will have more than 2,000 franchised and company owned restaurants around the world with combined annual system-wide sales of approximately $1.4 billion. Approximately 87% of GFG’s stores are located in the United States. Based on current projections and assumptions, including realization of expected synergies and return to pre-COVID restaurant sales, the acquisition is expected to eventually increase annual EBITDA by approximately $40 million to approximately $55-$60 million.
