With thousands of restaurants closing or struggling to survive, well-financed operators and private equity-backed chains are looking to scoop up solid brands to scale and grab market share.
"The large operators are getting larger, and it's really creating a separation between those independents and chains," said Trevor Boomstra, director of restaurants, hospitality, and leisure practice at global consulting firm AlixPartners. "We are hopeful to make more acquisitions and in discussion with some other brands we cannot share at this time," Kelly Roddy, CEO of Saladworks, told Insider.
Roger Lipton, restaurant chain analyst and founder of New York-based Lipton Financial Services, said more M&As are expected in the coming months as many companies and private equity firms will take advantage of low-interest rates. in proceeds year-to-date, according to Goldman Sachs. "There's been over $60 billion raised this year for these SPACs, and some of it in the restaurant space," said Lipton, noting OPES Acquisition Corp.
"What happens when interest rates are so ridiculous, it encourages misallocation of capital," he said. "Because what happens is, if you can borrow the money for nothing, you might as well take a shot.""No price is too low when the chain is stumbling and no price is too high when it's on a roll," Lipton said.
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