When the deal closes, FAT Brands will have spent $892.5 million on four transactions this year.
FAT Brands announced Monday that it will acquire 23-unit Native Grill & Wings for $20 million, marking the company's fourth transaction this year.
Native, based in Chandler, Arizona, is set to become FAT Brands' 17th brand, and will soon join Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Twin Peaks, Great American Cookies, Hot Dog on a Stick, Buffalo’s Cafe, Buffalo's Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Yalla Mediterranean, Ponderosa and Bonanza Steakhouses, and Fazoli's (transaction hasn't closed yet).
FAT Brands has more than 2,300 franchised and company-run locations globally and systemwide sales of roughly $2.3 billion. The addition of Native, including stores scheduled to open and under development, is projected to raise FAT Brands' post-COVID normalized EBITDA by roughly $3 million next year.
“With the chicken wing sector growing in popularity throughout the pandemic, we knew that we wanted to continue developing our portfolio further into this category by bringing in a brand that would complement our existing wing concepts,” FAT Brands CEO Andy Wiederhorn said in a statement. “Native Grill & Wings has been on our radar for some time given its ability to remain nimble and deliver strong system-wide sales growth over the past year. We’re pleased to build off the success established by Dan Chaon, Native brand CEO, and Cybeck Capital Partners, LLC, and we look forward to expanding Native Grill & Wings’ presence into new markets.”
The 41-year-old Native, with stores in Arizona, Texas, and Illinois, claims to be the first brand to bring wings to the Southwest. CEO Dan Chaon told FSR in November 2020 that off-premises represented 30 percent of sales and that loyalty signups had soared 135 percent amid the pandemic. The executive also noted that Native was working on a prototype that remained focused on full service and live sports, but in a smaller footprint with a pickup window.
FAT Brands will acquire Native from Wingtime, a subsidiary of private-equity firm Cybeck Capital Partners.
“The Native Grill & Wings system is poised for a breakout to the next level, and FAT Brands has the resources and experience that can take it there. We are pleased to pass the baton to FAT Brands for the benefit of the system,” Joe O’Hara, managing partner of Cybeck Capital Partners, said in a statement. Native Grill & Wings CEO Dan Chaon commented, “I’ve known the FAT Brands team for quite a while. The franchising experience and operational synergies that they bring to the table can maximize the potential of the Native Grill & Wings brand and our franchisees.”
When all deals finalize, Wiederhorn and FAT Brands will have spent $892.5 million in 2021 to buy Global Franchise Group, Twin Peaks, Fazoli's and Native.
The purchase will be funded with cash from the issuance of new notes from FAT Brands' securitization facilities. The transaction is expected to close in mid-December. For FAT Brands, Foley & Lardner LLP acted as legal counsel. For Wingtime, Taft Stettinius & Hollister LLP acted as legal counsel.