First Watch Restaurants Inc. has acquired The Egg & I Restaurants, the company said Wednesday, in a deal that merges the two largest chains in the burgeoning breakfast-and-lunch segment.
Terms of the deal, which closed Wednesday, were not disclosed, but the acquisition gives First Watch 267 restaurants in 26 states, as well as 18 units under development. The Egg & I will keep its name, and Don Lamb will remain CEO of the Centennial, Colo.-based chain.
“The Egg & I is a wonderful concept with a loyal following that has experienced tremendous growth, particularly over the past several years,” First Watch CEO Ken Pendery said in a statement. “We saw this acquisition as an opportunity to expand our presence in markets where we don’t currently operate.”
Bradenton, Fla.-based First Watch mostly has units in Eastern markets, while The Egg & I is concentrated in Western markets.
Lamb said in a statement: “This partnership with First Watch not only allows us to create the largest restaurant company in the breakfast, brunch and lunch category, but it also provides us an opportunity to combine the incredible strengths of these two leading brands, creating a better guest experience than ever before. I had the chance to spend quite a bit of time with First Watch CEO Ken Pendery and his executive team, and I have no doubt that we will work well together.”
First Watch has been on a buying spree. Last year, it acquired The Good Egg, an Arizona-based concept, and Bread & Company, a Nashville-based fast-casual concept. In 2012, First Watch bought two J. Christopher’s family-dining restaurants.
First Watch’s acquisition of The Egg & I is its biggest deal to date. The Egg & I was founded in 1987, and has 114 restaurants in 20 states. First Watch has 153 locations in 17 states. Both concepts operate both company-owned and franchised locations.
First Watch is owned by the private-equity firm Freeman Spogli & Co. Over the years, the company has grown due in part to its strong reputation for quality, which has won the chain more than 200 local awards for best breakfast or lunch.
Its latest award came from Nation’s Restaurant News. Earlier this year, it received top honors among family-dining concepts in NRN’s annual Consumer Picks report.
Its reputation has enabled the chain to grow aggressively, both through unit growth and acquisitions. That growth is apparently not slowing down.
“We’ll have organic growth and franchise growth and the occasional acquisition,” Pendery told NRN in December 2014.