Top 10 Restaurant Mergers and Acquisitions of 2021
While mergers and acquisitions fell in 2020, activity picked up this year as the foodservice segment started showing signs of recovery, particularly in the QSR space.
In 2021, mergers and acquisitions were largely driven by abundant capital, bank finance and other funding. Many agreements were triggered by restaurant portfolio companies expanding their existing platforms. Large state-owned companies and consolidators tend to prefer owning brands rather than operating the stores themselves, and try to put together a group of brands that represent a bit of a cross-section of the industry, said Nick Cole, head of retail. catering finance at MUFG Americas.
Concerns about tax laws that could change in 2022 are also pushing companies to close deals by the end of the year, Cole said. A proposed change to the capital gains tax would increase the tax percentage of businesses earning more than $ 1 million from a sale, thereby reducing the amount of money the business owner earns . Summer also ushered in a wave of deal announcements, with six deals in just over a week.
International restaurant brands added Fire station submarines to its platform in a $ 1 billion deal, the biggest deal of the year. BBQ Holdings moved to seven concepts after two transactions, while Fat Brands now owns 14 companies after two transactions This year. Fat’s $ 442 million acquisition Global franchise group was the most ambitious company purchase to date, adding a group of five brands to its portfolio. But Fat didn’t stop there either, adding Twin Peaks, Native Grill & Wings and Fazoli’s to its platform this year. Woworks has also strengthened its new platform with the purchase of Simple Greek while the parent of Fuzzy’s Taco Shop has created a new group of restaurants called Experiential brands, suggesting future redemptions.
The world of franchisees, meanwhile, is largely made up of family businesses that started franchising with big brands in the 1970s and built their portfolios in the 1980s and 1990s. Now a lot of these operators are ready to sell or transfer the business to the next generation of family members, Cole said. pacific bells, one of Taco Bell’s largest franchisees, has sold to private investment firm Orangewood Partners, for example.
Private Equity Ready to Take Over Small, High Growth Firms, and there was a lot of companies are eyeing the next emerging brands.
While much of the focus has been on mergers and acquisitions in 2021 on fast food chains, investor appetites may soon change.
“[M&A] might calm down in the first half of  just because the results of fast food companies will be down a bit just because of some of the inflation factors that [have] a tendency to cool the desire of salespeople, ”said Cole.
The second half of 2022 could see an increase in transactions around full-service brands. There will likely be fewer full-service restaurants due to the closure of many independents, he said. These restaurants have been in trouble since government funding for restaurants are depleted, and they don’t have the same tools businesses can use to manage supply chain and hiring issues, Cole said.
Assuming there isn’t another increase in COVID-19 cases – which could be a risk as the omicron variant spreads – full-service restaurants might see a better operating environment with less competition, which might make them more attractive to shoppers.
In the meantime, discover the most significant mergers and acquisitions transactions of 2021.