The One Group, the parent company of the upscale STK and Kona Grill chains, plans to acquire the owner of the Benihana Japanese steakhouse chain in a deal valued at $365 million.
The acquisition of Safflower Holdings, which also owns the smaller RA Sushi chain, will nearly triple One Group’s footprint to 168 venues worldwide, from 63. Benihana and RA together have 105 locations in the U.S., Caribbean and Central and South America, 17 of which are licensed or franchised.
Miami-based Benihana was founded in 1964 and is credited with bringing teppanyaki to the U.S. Teppanyaki is a Japanese cooking style in which chefs cook on a flat-top grill in front of customers.
The smaller RA specializes in sushi and cocktails in a lively, bar-forward atmosphere. It was founded in 1997 and acquired by Benihana in 2002.
The two brands would seem to fit in well alongside Denver-based One’s high-end, experiential full-service concepts. STK is a 28-unit modern steakhouse and Kona Grill is a 27-unit polished-casual bar and grill. One also owns One Hospitality, which operates restaurants and bars in eight hotels and casinos in the U.S. and Europe.
“We are delighted to welcome Benihana, an American cultural icon with timeless appeal that transcends generations and offers unparalleled guest experiences, to The One Group family,” said Emanuel “Manny” Hilario, president and CEO of the One Group, in a statement. He added that it is part of One's strategy to diversify its portfolio of experiential concepts.
The deal is expected to contribute $575 million in annualized systemwide revenue for One and generate $20 million worth of synergies, the company said. One's combined revenues will be somewhere in the range of $900 million.
One is financing the acquisition with part of a new $390 million term loan and credit facility and $160 million in preferred equity. Most of the equity will be issued to Hill Path Capital, which will put founder Scott Ross and co-founder James Chambers on ONE Group’s board.
The deal is expected to close in the second quarter.
It's One's second acquisition after it bought Kona out of bankruptcy in 2019 for $25 million.
Consumers flocked to STK and Kona after pandemic lockdowns were lifted, but the brands have come back down to earth since. One’s same-store sales fell 2.7% year over year in 2023, while total revenues rose 5.1%, to $332.8 million.
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