Fatburger owner Fat Brands (NASDAQ:FAT) said on Thursday it would buy 1950s diner-style chain Johnny Rockets from private equity firm Sun Capital Partners for about $25 million.
The deal comes as fast-food restaurants see a surge in demand for comfort food delivered to their homes, as lockdowns spurred by the COVID-19 pandemic kept many diners away from restaurants.
The deal will be funded through cash on hand and proceeds generated from the Company’s securitization facility. The purchase is expected to be completed in September.
Johnny Rockets was founded in 1986 with its first location on Melrose Avenue in Los Angeles and became famous for its 1950s diner-style decor, burgers and ice cream shakes.
Fat Brands’ Chief Executive Officer Andy Wiederhorn said the company expects to modernize Johnny Rocket’s menu, which already has a black bean burger, by adding plant-based options and vegan milkshakes.
According to Wiederhorn, "Similar to Fatburger, Johnny Rockets got its start in Los Angeles, and we couldn’t be more pleased to add another true staple in our home city to our portfolio. This acquisition is a transformative event for FAT Brands in terms of scale and brand awareness. We see a lot of synergy with Johnny Rockets and our current restaurant concepts and we are eager to take the brand to new heights."
The deal is expected to be completed in September, and following the acquisition, Fat Brands will have more than 700 franchised and company-owned restaurants.
FAT shares, well, fattened $4.47, or 124%, to $8.17
