Dive Brief:
- Fiesta Restaurant Group will sell for $8.50 per share, roughly equivalent to $220 million based on the company’s present market captialization, in an all-cash transaction to Authentic Restaurant Brands, the companies announced on Monday. ARB is part of Garnett Station Partners and owns sandwich chain Primanti Bros.
- Fiesta will go private as part of the deal, and its leadership team will continue to operate fast casual chain Pollo Tropical as an independent brand within ARB’s portfolio.
- The deal follows a handful of major restaurant acquisitions in H1 2023 — including Darden’s purchase of Ruth’s Hospitality for $715 million and Corner Bakery’s sale to SSCP Restaurant Investors for $15 million.
Dive Insight:
This acquisition comes amid a period of modest growth for Fiesta. On Monday, the company reported a year-over-year same-store sales bump of 9.6% for Q2 and comparable transaction growth of 3.6%, building on Q1 gains. The deal is expected to close in Q4 2023.
President and CEO Dirk Montgomery, who assumed an interm chief executive role in December before securing a permanent title in April, has been overhauling the restaurant company to boost transactions and grow margins.
“The transaction validates the actions we have taken to position Pollo Tropical in our markets, enhance the guest experience and improve performance across our footprint,” Montgomery said in a press release. “Garnett Station has a proven track record of successfully identifying and partnering with iconic, regionally focused brands to help accelerate their growth.”
Under this strategy umbrella, Fiesta is making improvements to employee training in a bid to optimize “guest experience, food quality, speed, accuracy and hospitality,” Montgomery said in April. The company is continuing to deploy its leadership development platform across its operations this year and is developing new training modules to make operations more efficient.
“We made progress compared to the first quarter in key metrics including improved speed of service, higher guest satisfaction and reduced hourly and management turnover,” Montgomery said in a statement Monday.
Fiesta, which owns 137-unit chain Pollo Tropical, sold Taco Cabana to operator YTC Enterprises for $85 million in 2021 to pare down its debts.
Fiesta joins ARB’s existing stable of restaurant brands, including sports bar chain P.J. Whelihan’s, Primanti Bros. and Mambo Seafood.
