Editor's note: This story has been confirmed by Fiesta Restaurant Group, and updated with more information.
Fiesta Restaurant Group, the Dallas-based parent company of Pollo Tropical, is reportedly going to be sold to Authentic Restaurant Brands for $225 million. News of the deal was initially reported by the Wall Street Journal Sunday. Fiesta confirmed the all-cash transaction Monday morning.
ARB is part of New York-based Garnett Station Partners and includes Primanti Bros., PJ Whelihan’s, and Mambo Seafood. Garnett Station Partners also acquired Firebirds Wood Fire Grill in March and has investments in Checkers, Kona Ice, Fat Tuesday, and Carrols Restaurant Group, in addition to companies in other segments. Upon closing the transaction, Fiesta will operate as a privately-held company and Pollo Tropical will keep its headquarters in Miami. Further, Fiesta's leadership team will continue to operate Pollo Tropical as an independent brand within the ARB platform. Dirk Montgomery was named CEO in April after previously serving as CFO.
“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. With this transaction, Fiesta will be better positioned financially and operationally to advance our mission of providing great food and hospitality to our guests. Garnett Station has a proven track record of successfully identifying and partnering with iconic, regionally focused brands to help accelerate their growth. We look forward to working closely with Alex, Felipe and the rest of the Garnett Station and ARB teams and to benefiting from their extensive restaurant, digital and analytical expertise as we focus on supporting the success of our brand, franchisees and people," Montgomery said in a statement.
On its website, ARB notes it is committed to growing its brands by leveraging their “respective foundations, while sharing best practices under common ownership.” The mergers and acquisitions market has picked up a bit this year as more companies merge or add brands to their portfolio to achieve economic efficiencies after three years of historic challenges, including inflationary pressures.
“We have been fans of Fiesta and their Pollo Tropical restaurants for some time,” Alex Macedo, chairman of Authentic Restaurant Brands, said in a statement. “Pollo Tropical restaurants are a mainstay on the dining scene throughout Florida, and we are confident that ARB is a perfect partner to harness the power of the brand for the future.”
“Fiesta and Pollo Tropical restaurants are a natural fit into ARB’s existing portfolio,” Matt Perelman, managing partner and co-founder of Garnett Station Partners, said in a statement. “Pollo Tropical restaurants have a storied heritage and a deep-rooted connection with their local communities that perfectly align with ARB’s ethos and value proposition. ARB looks forward to working with Dirk and Fiesta’s leadership.”
Fiesta became a public company on May 7, 2012 through a spin-off from Carrols Restaurant Group and trades on the Nasdaq under the symbol FRGI. The company used to own Taco Cabana but divested that chain in August 2021.
A $225 million deal is worth $8.50 per share. The company’s 52-week range has been $5.89 to $9.28. According to Datassential, Pollo Tropical ended 2022 with about 145 units and $387.4 million in sales, representing an 8.4% increase from 2021. In May, the company reported Q1 results that included same-store sales growth of nearly 10% and positive transaction growth of 1%. The quarter marked the fourth consecutive month of positive year-over-year traffic trends for the first time in over five years.
The transaction is expected to be completed in Q4.
Contact Alicia Kelso at [email protected]