Dive Brief:

• BurgerFi on Monday entered a definitive agreement to acquire Anthony's Coal Fired Pizza & Wings from L Catterton for about $161.3 million. That payment comprises of $33.6 million in common stock, $53 million in new junior non-convertible preferred equity and the assumption of existing debt, according to a press release.
• The transaction is expected to close during the fourth quarter, and will make L Catterton one of BurgerFi's largest shareholders.
• This is BurgerFi's first acquisition, and comes a little over one year after the company went public through a $100 million deal with blank check company OPES Acquisition Corp. 

Dive Insight:

The transaction is part of BurgerFi's strategy to become a multi-brand platform, BurgerFi Executive Chairman Ophir Sternberg said in the press release. With the addition of Anthony's, which has 61 locations, BurgerFi will have 177 restaurants across the U.S., according to the press release. 

"We are well positioned to continue the growth of our existing BurgerFi brand and leverage our scale to unlock value from strategic acquisitions. Our focus on premium fast-casual brands allows us to share expertise, capabilities and best practices across the board," Sternberg said.

The public company is entering the transaction with relatively strong footing. Its systemwide restaurant sales grew 63% year-over-year to over $44 million during Q2 2021 and same-store sales were up 39% in its corporate locations, according to an earnings release. 

BurgerFi has been building up its tech stack and hired a chief technology officer earlier this year, which could benefit the pizza restaurant. BurgerFi is focusing on building its loyalty, mobile application and delivery features as well as payment capabilities, BurgerFi CTO Karl Goodhew said in May. 

The burger chain also will benefit from Anthony's strong presence in Florida, where it is based. BurgerFi has over 60 locations in the Sunshine State, making it the chain's largest market. On the company's Q2 2021 earnings call, Julio Ramirez, BurgerFi CEO, said the company intends to grow throughout the Southeast and northward along the Eastern seaboard, where Anthony's already has several locations. 

BurgerFi will also continue to push for nontraditional development. The company, which has partnerships with Reef Technology and Epic Kitchens, has over 25 ghost kitchens in operation, Ramirez said during the company's Q2 2021 earnings call. This strategy has helped the company better understand how it can build its brands outside of its core strategy of company-owned and franchise restaurants, Ramirez said.

The restaurant is also on track to hit its target of 15 to 20 new ghost kitchens by the end of the year, many of which opened during Q2 and Q3, BurgerFi CFO Michael Rabinovitch said during the call. This strategy could also benefit Anthony's, as the chain already has a complete off-premise channel with curbside pickup, delivery and takeout, according to its website.