The US and the UK have much in common including economies that run along similar lines. So, we like to keep our eyes and ears open to what’s going on in the American hospitality industry.
Patterns either side of the Atlantic are often insights to the other.
Restaurant chain CraftWorks, the parent company of casual dining brands Logan’s Roadhouse and Old Chicago Pizza & Taproom was acquired last week by Fortress Investment Group.
US restaurant acquisition pace quickens – Casual dining move for QSR
Regular H&C News readers may be familiar with Fortress Investment Group as we reported only last week on another of their acquisitions, QSR burger chain Krystal.
Founded in 1998, Fortress Investment Group is a global investment manager with offices in Atlanta and approximately $43.5 billion of assets under management.
Fortress paid $93 million for CraftWorks, $45 million less than the original offer of$138 million earlier this year in March.
The acquisition was an acrimonious one that progressed through US courts.
US restaurant acquisition pace quickens – delaying tactics driving down price
The initial acquisition move occurred at the same time as the onset of the COVID-19 pandemic. The close of many restaurants initially led to delays. Following US government guidelines CraftWorks shut all 261 restaurants and released 18,000 employees previously furloughed. Craftworks then filed for bankruptcy, also in March.
The bankruptcy filing led to a scramble by creditors to secure payments, including landlords reported to be owed $2 to $4 million.
The Judge overseeing the case referred to the acquisition deal received as the ‘best available option’ within a challenging case that was impacted hugely by the Covid-19 crisis.
The incumbent senior management team of CraftWorks prior to the deal have been replaced by Fortress senior executives. An identical tactic deployed in their takeover of Krystal.
Craftworks’ other brands include Big River Grille & Brewing Works, ChopHouse & Brewery, A1A Ale Works, Ragtime Tavern Seafood & Grill, Seven Bridges Grille & Brewery, and Sing Sing.
With such vigorous M&A activity in the opening months of the Covid-19 crisis, we suspect we will be reporting on Fortress again very soon.