Applebee’s and IHOP parent company Dine Brands Global, Inc. announced Monday the intention to acquire fast-casual Mexican chain Fuzzy’s Taco Shop from NRD Capital subsidiary Experiential Brands LLC for $80 million. This will be the third brand in the Dine portfolio.
Fuzzy’s CEO Paul Damico will still lead the brand under the Dine Brands umbrella. Fuzzy’s currently has 138 stores across 18 states, with approximately $230 million in systemwide sales in 2022. Over time, Dine Brands hopes to double the Fuzzy’s store count.
"Fuzzy’s Taco Shop is a compelling business with a loyal customer base and a distinct identity. It is an attractive asset with a tremendous growth trajectory and will be a complementary addition to our highly franchised portfolio,” John Peyton, CEO of Dine Brands said in a statement. “By adding Fuzzy’s to the Dine Brands family, we are investing in a high growth concept as part of our longer-term growth agenda, which is aligned with our strategy to build shareholder value.”
According to Dine Brands, the deal is expected to be “immediately accretive” as it adds a “complementary daypart” to Dine Brands portfolio, which mainly focuses on casual-dining during the dinner daypart.
“I’m incredibly proud of the work the Fuzzy’s team and franchisees have accomplished over the past few years, which has enabled us to enter this new chapter of growth together with Dine Brands,” Paul Damico said in a statement. “With Dine Brands’ substantial industry resources, we will be well positioned to build upon our proven successes and accelerate our growth.”
Centerview Partners LLC acted as exclusive financial advisor and Sidley Austin LLP acted as legal advisor to Dine Brands on the transaction. Arlington Capital Advisors served as exclusive financial advisor to Fuzzy’s Taco Shop and Cheng Cohen LLC served as legal advisor to Fuzzy’s Taco Shop and NRD Holding Company on the transaction.
Dine Brands said that although the deal represents a “compelling M&A model” for the company, they have no current plans for further acquisitions.
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