Sources tell FOX Business’ Charlie Gasparino that SPARC Group’s sweet offers for Brooks Brothers forced others to drop out of the bid, but at least one bidder who dropped out may eventually submit a bid.
Fat Brands Inc. buys burger chain Johnny Rockets Group Inc., expands its stature of restaurant brands into a bet that demand for casual food will return from the coronavirus pandemic.
The company in Beverly Hills, California, said Thursday that it would pay about $ 25 million for Johnny Rockets, and expand its holdings to about 700 locations across nine chains when the deal is completed next month.
Restaurants across the country are operating with restrictions as a result of the pandemic. Many have added tables for open seating as takeout operations have expanded to include sales in closed as well as greatly reduced dining rooms.
Add to their challenges are higher labor costs and expenses for cleaning and protective equipment. Many independent restaurants close for good.
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Still, restaurant operators and distributors for food services say that after months, people return to restaurant holidays at home and provide shelter. Fat Brands Chief Executive Andy Wiederhorn said the deal for Johnny Rockets reflects his expectation that customers will return to casual-dining chains after the pandemic disappeared. Already, he said, sales in some markets have jumped thanks to seated seats and delivery.
| Ticker | Security | Last | Change | Change% |
|---|---|---|---|---|
| FET | FAT BRANDS INC. | 8.35 | +4.82 | + 136.40% |
“When working at home becomes a bigger part of daily life, it just adds to the demand to socialize in some way,” he said in an interview.
He said Fat Brands would consider bringing more casual dining brands into a portfolio that also includes Fatburger and Hurricane Grill & Wings. By buying regional chains, Fat Brands can scale and negotiate better deals for ads and deliveries, added Mr. Wiederhorn.
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“There is now an opportunity to take casual dining chains and get a consolidation of similar concepts,” he said.
He said Fat Brands expressed interest in Johnny Rockets when Sun Capital Partners Inc. in January a sales process for the company began. That process was halted when the pandemic took hold in the US, but deal talks re-emerged in the summer.
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Fat Brands completed a $ 40 million financing round in March that will provide the capital to pursue more deals. Since going public in 2017, the company has acquired Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, among other chains.
