BurgerFi International Inc., announced that it has entered into a definitive agreement to acquire Anthony’s Coal Fired Pizza & Wings from L Catterton for approximately $161.3 million, comprised of $33.6 million in common stock, $53.0 million in new junior non-convertible preferred equity and the assumption of existing debt, all subject to closing adjustments (see “Transaction Details” below). The shares of common stock issued as consideration will be determined based on the 30 day volume weighted average price of BFI common stock through the day prior to closing, up to a cap of $14.25 per share and a minimum of $10.25 per share. At the closing of the transaction, L Catterton, the largest global consumer-focused private equity firm, will become one of BurgerFi’s largest shareholders. BurgerFi expects the transaction will be accretive to EPS to common shareholders and EBITDA in 2022.
BurgerFi was named Fast Casual’s #1 Brand of the year for 2021 in the “Top 100 Movers and Shakers” list, and the top fast casual better burger chain in USA Today’s “10 Best Readers’ Choice Awards” for 2021. With the acquisition of Anthony’s, BurgerFi will have 177 systemwide restaurant locations across the country through its two premium casual dining brands, with 61 Anthony’s locations and 116 BurgerFi locations. “This is our first acquisition in building a premium multibrand platform. We are well positioned to continue the growth of our existing BurgerFi brand and leverage our scale to unlock value from strategic acquisitions. Our focus on premium fast-casual brands allows us to share expertise, capabilities and best practices across the board,” said Ophir Sternberg, Executive Chairman of BurgerFi.
Anthony’s, founded in 2002 and headquartered in Fort Lauderdale, FL, is a leading operator of casual dining pizza restaurants with a loyal fan base and, like BurgerFi, a high concentration of its locations in the state of Florida. Anthony’s concept is centered around a 900-degree coal fired oven, and its streamlined menu offers “well-done” pizza, coal fired chicken wings, homemade meatballs, and a variety of handcrafted sandwiches and salads. Ian Baines, Chief Executive Officer of Anthony’s, said “Anthony’s Coal Fired Pizza & Wings will be a fantastic addition to the BurgerFi family. It is a well-positioned, differentiated pizza and wing concept with industry-leading average unit volumes and strong profitability. BurgerFi is a very dynamic growth brand and I am honored to work with their great team as we continue to pursue and expand on our growth strategy together.”
“Both Anthony’s Coal Fired Pizza & Wings and BurgerFi bring high-quality ingredients, impressive customer loyalty and affinity, and strong management teams to the table,” said Andrew Taub, Managing Partner at L Catterton, who will be joining the board of directors of BurgerFi following the completion of the transaction. “We are delighted to continue our support of Anthony’s as they join one of the country’s most innovative players in the restaurant space. Together, these brands will establish the beginning of a restaurant platform well-positioned for growth and success.”
Ophir Sternberg will lead both the BurgerFi and Anthony’s brands in his continuing role of Executive Chairman of BurgerFi and Mike Rabinovitch will continue as BurgerFi Chief Financial Officer. At the closing of the transaction, Ian Baines will become the Chief Executive Officer of BurgerFi while Julio Ramirez will remain Chief Executive Officer and President of the BurgerFi brand and Patrick Renna will become President of the Anthony’s brand. The transaction is expected to close in the fourth quarter of 2021, subject to certain customary closing conditions.
Anthony’s Coal Fired Pizza & Wings Highlights
Unique oven technology and high quality ingredients provide for exceptional value. Anthony’s casual dining pizza and wing brand is centered around a 900-degree coal fired oven, and its streamlined menu consists of approximately 25 items. Anthony’s prides itself on serving fresh, never frozen, high-quality ingredients. Their menu offers “well-done” pizza, coal fired chicken wings, homemade meatballs, and a variety of handcrafted sandwiches and salads. The pizzas are prepared using a unique coal fired oven, which seals in natural flavors while creating a lightly-charred crust. The majority of Anthony’s restaurants have a full bar and all locations feature a deep wine and craft beer selection to round out the menu.
Contemporary environment provides differentiation from its peers. Anthony’s offers “exhibition cooking” within a contemporary environment. The restaurants feature flat-screen TVs with a sports and entertainment focus providing differentiation from its peers. Anthony’s loyalists can also enjoy the brand out of the restaurant by ordering direct at www.acfp.com or through a variety of food delivery services.
Strong unit economics and revenue growth. Anthony’s primarily operates in suburban strip centers with an average square footage per unit of 3,200. With pre-Covid average unit sales volume of approximately $2.3 million and a restaurant-level operating margin of 19%, the restaurants generated sales per square foot of nearly $700, which is top-tier in the industry. Anthony’s grew its revenue at a compound annual growth rate of 12% from 2011 to 2019.
Launch of new virtual concept and smaller restaurant provides optionality for additional growth and revenue streams. Launched in November 2020, “The Roasted Wing” is a virtual concept that features Anthony’s signature roasted chicken wings and garlic knots available for order outside the Anthony’s restaurants through Anthony’s delivery partners. Anthony’s is known for its coal fired chicken wings, which are marinated overnight with garlic and fresh herbs before being roasted in its 900-degree, coal fired oven.
In 2021, Anthony’s launched its new fast-casual format, which provides an additional lever for expected future growth. Built in a smaller footprint to enable broader real estate opportunities and an even more streamlined operating model, this new format is anticipated to be an exciting growth avenue for both corporate and franchised expansion.
The total purchase price of $161.3 million is funded from the issuance of $33.6 million in common stock, the assumption of an estimated $74.7 million in net debt and $53.0 million of new junior non-convertible preferred equity, all subject to closing adjustments based on final determination of net debt and costs.
BTIG, LLC served as financial advisor and Holland & Knight LLP acted as legal counsel to BurgerFi. Arlington Capital Advisors served as a sellside advisor and Proskauer Rose LLP acted as legal counsel to L Catterton.
BurgerFi will hold a conference call tomorrow, October 12, at 8:30 a.m. Eastern Time to discuss the acquisition.
Date: Tuesday, October 12, 2021
Time: 8:30 a.m. Eastern Time
Toll-free dial-in number: (833) 693-0539
International dial-in number: (661) 407-1580
Conference ID: 4569632
Please call the conference telephone number 5-10 minutes prior to the start time. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact ICR at (646) 430-2216.
The conference call will be broadcast live and available for replay on BurgerFi’s Investor Relations website at ir.burgerfi.com.