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An affiliate of Union Square Hospitality Group is the latest restaurant-associated company to from a SPAC.

Danny Meyer’s Union Square Hospitality Group files to raise $250 million for a new SPAC

The new company would seek to acquire a company with similar cultural values

Danny Meyer has joined the growing number of restaurant veterans who have formed special acquisition companies, or SPACs. An affiliate of his Union Square Hospitality Group, USHG Acquisition, on Friday filed papers with the Securities & Exchange Commission to raise $250 million in an initial public offering, and then list on the New York Stock Exchange under the ticker HUGSU.

Meyer, who is the founder and CEO of USHG, is chairman of the new SPAC. Its CEO is investment banker Adam Sokoloff of Asgard Capital Partners.

USHG chief financial officer Tiffany Daniele is also CFO of the new company. She joined USHG in October of 2020 after two years as vice president for global corporate financial planning & analysis at Tapestry, Inc., which owns the luxury brands Coach, Kate Spade and Stuart Weitzman.

On the SPAC’s advisory board are Clarence Otis, former CEO of Olive Garden parent Darden Restaurants Inc.; Jonathan Sokoloff, managing partner of private equity firm Leonard Green & Partners; and the following USHG executives: chief legal officer Avisheh Avini, chief people officer Patty Simpson, chief technology officer Kelly MacPherson, chief marketing officer Rani Yadav, president Chip Wade, former chief operations officer Richard Coraine and Peter Mavrovitis, co-founder and managing partner of Enlightened Hospitality Investments, a growth equity fund affiliated with USHG.

USHG Investments LLC, an affiliate of USHG, is the sponsor of the SPAC.

A SPAC is an increasingly popular way of quickly raising funds and then taking a private company public. SPACs raise the funds based on their founders’ reputations, list their company on a stock market and then seek a private company to acquire. The investors then generally have the right to have their investment refunded if they don’t approve of the acquisition, but if they do approve, the acquired company then becomes a public one and the SPAC is dissolved.

Billionaire restaurant operator Tilman Fertitta recently announced his plans to take his company public again via a SPAC formed by &Pizza co-founder Doug Jacob and Ruby Tuesday founder Sandy Beal.

Activist investment firm Starboard Value, which engineered a takeover of Darden Restaurants and has a current activist position in Papa John’s International Inc., formed a SPAC last summer.

The co-founder of Barcelona and Bartaco, Andy Pforzheimer, teamed up with former Jamba Juice CEO Doug Pace, to form a SPAC last month, and this month former Dine Brands CEO Julia Stewart and Thomas Keller Restaurant Group president and CEO Joseph Essa filed for an IPO for a SPAC.

In the SEC filing, Meyer said the new SPAC was looking to acquire a people-first “culture-driven” business in any number of sectors, including technology, e-commerce, food & beverage, health, retail and consumer goods.

They have 24 months to make such a purchase, according to the documents.

Meyer, a well-respected foodservice industry leader known for operating restaurants with great service, clearly plans to bank on that reputation with the new SPAC. In the SEC filing, he quotes from his 2006 book, “Setting the Table,” which is considered a must-read by many people in the hospitality business.

“You may think, as I once did, that I’m primarily in the business of serving good food,” he quoted himself in the filing. “Actually, though, food is secondary to something that matters even more. In the end, what’s most meaningful is creating positive, uplifting outcomes for human experiences and human relationships. Business, like life, is all about how you make people feel. It’s that simple, and it’s that hard.”

He continued, in his letter to potential investors: “The business philosophy that I outlined in Setting the Table resonates with me even more today than when I first penned it. At a time when how well you do the thing you do is no longer enough to distinguish your company, product, or brand, how you make people feel has become the alpha advantage. My fundamental viewpoint is that hospitality exists when you believe the other person is on your side; and whether you are delivering a plate to a table, developing an app, providing healthcare, or making a consumer product, the ability to offer hospitality in all of your stakeholder interactions drives meaningful experiences, relationships and, ultimately, shareholder value.

“My appreciation for the power of hospitality and desire to harness it have been central to every success our businesses have ever had. I have observed how crucial it is to put hospitality to work, first for our team members and, subsequently, for all stakeholders in a virtuous cycle — in successive order, our guests, community, suppliers and investors. I call this approach to setting priorities ‘Enlightened Hospitality.’ It stands some of the more traditional business approaches on their head, but it is the foundation of every business decision we have made and the reason for the shareholder value we have created.

“Enlightened Hospitality transcends industry. It is the first filter for how we create businesses and select investment opportunities. We are looking for gifted founders and management teams that put their teams first in order to drive this virtuous cycle, no matter the industry in which they operate. We back leaders who know how to tap into the human spirit to fuel their transformational ideas as they scale their companies. They know that this people-first mentality drives larger, more sustainable wins for every stakeholder.”

He said the SPAC was looking for businesses whose stakeholders, including customers, employees, suppliers and communities “have all become enthusiastic fans and brand evangelists.”

The filing listed the following criteria for target companies:

  • a distinct people-first culture that aligns with USHG’s core values
  • a superior leadership team with a clear vision and strategy
  • a growth-oriented and scalable business with a large, addressable market opportunity
  • at a “key inflection point of its growth trajectory” — with a successful track record, but likely to benefit from USHG’s “like-minded culture, extensive network and deep experience in order to reach its ultimate potential.”

USHG now includes more than 20 restaurants and bars in New York City and Washington, D.C., including the Union Square Café, Gramercy Tavern and The Modern, as well as a catering and events company, venue management and consulting businesses. It also founded burger chain

Contact Bret Thorn at [email protected] 

Follow him on Twitter: @foodwriterdiary

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