Another Acquisition. FAT Brands announced an agreement to acquire Native Grill & Wings, an Arizona-based restaurant chain known for its cult-like following and 20 wing flavors that guests can order by the individual wing, for $20 million. The acquisition will be funded with cash from the issuance of new notes from the Company’s securitization facilities and is expected to close in mid-December 2021. The business is expected to increase the Company’s post-COVID normalized EBITDA by approximately $3 million in 2022.Native Grill & Wings. Based in Chandler, Arizona, Native Grill & Wings is a family-friendly, polished sports grill with 23 franchised locations throughout Arizona, Illinois, and Texas. Native Grill will complement Fat Brands' existing wing concepts, Buffalo's and Hurricanes, in our view.Post-Acquisition FAT. With the acquisition of Native Grill & Wings, FAT Brands will have more than 2,300 franchised and corporate-owned stores around the world with a combined annual system-wide sales of approximately $2.3 billion through 17 different brands. For reference, at the beginning of 2021, FAT had 7 concepts, 705 locations, and $710 million of system-wide sales.Organic Growth Ongoing. FAT is partnering with A.D.T.J. Development LLC to open 25 Fatburger and Buffalo’s Express stores throughout the state of Illinois, in particular in Chicago and the surrounding area. As a reminder, the opening of new locations by franchisees is purely additive to FAT Brands' financials and will be an important future driver of financial results.Maintaining Outperform, $25 PT. We believe the recent acquisitions represent a new paradigm for FAT Brands and vaults the Company into the "big leagues," in our view. We are maintaining our Outperform rating and our 12-month price target of $25, which equates to 14.7 times normalized 2022 EBITDA, still a discount to its peer group. Read More >>