After 18 months of speculation and preparation, FAT Brands is ready to spin off the newly formed Twin Hospitality Group (Twin Peaks and Smokey Bones Barbecue), which will become public at the end of the business day on Jan. 29, according to a registration statement filed with the U.S. Securities and Exchange Commission on Jan. 10.
When casual-dining chain Twin Peaks makes its IPO debut on Jan. 30, it will be trading under the Nasdaq symbol, TWNP, and valued at $0.0001 share. According to the SEC filing, FAT Brands will also distribute 5% of Twin Hospitality Group’s shares to 14,000 FAT Brands investors, which will entitle each shareholder to .15 of one share. According to FAT Brands founder and chairman Andy Wiederhorn, this will instantly create 14,000 Twin Peaks shareholders and help qualify the company for all Nasdaq listing requirements.
“It helps give a roadmap to investors of the Twin Peaks growth story, which is an amazing story of success, and going from 80-something restaurants when we bought it in 2021, to 115 open and more than 100 [franchised stores] sold,” Wiederhorn said during FAT Brands’ presentation Tuesday at the ICR conference in Orlando, Fla. “This is a business that we bought three years ago for $300 million, we put approximately $100 million dollars into it, including the acquisition of Smokey Bones, and then we grew the business by almost 50%.”
FAT Brands has said that the spinoff and public valuation of Twin Peaks would help to tamp down the company’s debt of more than $1 billion. Wiederhorn said during the FAT Brands ICR presentation that the company actually decided to go with preparing the polished-casual brand for an IPO rather than selling it off to private equity because it would be a higher value deal.
Of course, the initial public offering took longer than FAT Brands initially anticipated. Originally, Twin Peaks was anticipated to go public by the end of 2024.
“The IPO market has been extremely difficult the last few years for restaurant brands, and that led us to the conclusion to spin it off and get it ready to take advantage when that window opens at the true equity market,” Wiederhorn said. “We always kept Twin Peaks independent: We didn't integrate it with the rest of the business, and they were ready to go with their own management team. It’s well-positioned to raise capital and pay down debt.”
Wiederhorn added that he thinks that Twin Peaks could have some bolt-on acquisition opportunities in the future, which could either translate to conversions (like Smokey Bones stores, which have almost all been converted to Twin Peaks), or the acquisition of a similar, though smaller polished-casual dining/sports bar concept.
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