This post is part of the On the Margin blog.
For some time in the post-recessionary era, Tilman Fertitta was virtually a one-man acquisition band. At a time when investors couldn’t run from restaurants fast enough, the CEO of Landry’s Inc. was taking advantage of low prices to greatly expand his Houston-based empire.
He’s been relatively quiet on that front, until recently. Reuters late yesterday said the CEO of Landry’s is working with Jefferies Group LLC CEO Richard Handler to launch a special purpose acquisition company, or SPAC — better known as a “blank check” company.
The blank check company would be called Landcadia and could raise as much as $300 million in an initial public offering.
Blank check companies raise money from public investors in an IPO and use those funds to buy a company. In so doing, they take those companies public through a reverse merger.
The best example in the restaurant industry recently was the blank check company restaurateur Larry Levy used to buy Del Taco and take it public.
The Reuters report suggests that Lancadia could acquire a hospitality, gaming or restaurant company. All three would make sense, given Fertitta’s experience — in addition to the restaurants, he owns The Golden Nugget Hotel and Casinos and various other hotel and casino properties through Landry’s.
A restaurant acquisition through a blank check company would likely be a different format than Fertitta’s traditional strategy of buying and then merging with the Landry’s operation. The brand would have to stand out on its own.
Such blank check companies don’t necessarily have to buy an entire company. Some end up with minority positions in private concepts that are then taken public through the reverse merger. That’s how Burger King went public in 2012 after merging with a shell company co-owned by the investor Bill Ackman.
Fertitta has had a more public persona of late. He’s appearing on the CNBC reality TV program “Billionaire Buyer,” has a Twitter account and has been doing more media interviews.
His acquisitions over the years include Morton’s The Steakhouse, McCormick & Schmick’s, Claim Jumper, The Oceanaire and Bubba Gump Shrimp Co., among others. All together, the company operates more than 40 brands and has more than 500 properties.