Warmer months are typically cooler when it comes to restaurant industry mergers and acquisitions. Not so this year, which saw a parade of major investments and outright buyouts, including some surprising deals.
The Cheesecake Factory and Fox Restaurant Concepts
The Cheesecake Factory bought Fox Restaurant Concepts.
The upscale casual-dining chain has been working with Fox for some time, investing in Fox concept North Italia, for instance. This summer, that relationship evolved into an outright purchase, with Cheesecake paying $353 million for Fox and the rest of North Italia in a rare purchase of a concept creator by a national chain.
Cracker Barrel and Punch Bowl Social
Cracker Barrel invested in Punch Bowl Social.
The family-dining chain agreed to invest up to $140 million in the food and games concept. Cracker Barrel also gets the right to buy Punch Bowl outright. The investment in a hot chain that targets millennial consumers by one known for its older and more rural customer base was one of the surprises of the year.
Cooper’s Hawk Winery & Restaurants was bought by Ares Management.
Ares agreed to invest in the upscale casual-dining chain and wine club, valuing the company at close to $800 million and giving it a multiple of as much as 26 times earnings before interest, taxes, depreciation and amortization, or EBITDA.
Whataburger was bought by BDT Capital Partners.
The Texas-based fast-food institution was sold to investment firm BDT in June. The chain’s customers immediately protested the move, worrying about what a sale would mean for the venerable brand.
Starbucks invested in Brightloom.
You might not have heard of Brightloom, because it used to be called Eatsa, the restaurant chain that used touchscreens and cubbies—plus few people and no cash—to sell and deliver food. Starbucks made a major investment in the firm and also gave it access to its “digital flywheel,” which Brightloom will sell to restaurants and Starbucks’ international operators.
The Coffee Bean & Tea Leaf
The Coffee Bean & Tea Leaf was bought by Jollibee Foods.
Jollibee, the owner of Smashburger, paid $350 million for the coffee chain. The Coffee Bean has nearly 1,200 global locations, almost 300 of which are in the U.S. But the real prize is Asia, where The Coffee Bean is part of a growing number of companies gunning for a booming beverage market.
Del Frisco's Restaurant Group
Del Frisco's Restaurant Group was bought by L Catterton, which then sold off its steakhouse chains.
Private-equity firm L Catterton somewhat surprisingly stepped up to buy Del Frisco’s in June in a deal valued at $650 million. In September, L Catterton flipped the company's two steakhouse chains—Del Frisco's Double Eagle and Del Frisco's Grille—to Landry's.
L Catterton will keep Del Frisco's other concepts, Barcelona Wine Bar and Bartaco.
Kona Grill was bought by The One Group.
The One Group, parent company of the STK high-end steakhouse chain, agreed to pay $25 million for Kona Grill out of bankruptcy court. It was the only bidder for the upscale-casual chain, and it apparently plans to use it as a growth vehicle.