Dive Brief:
- Fat Brands’ Twin Hospitality Group, which includes Twin Peaks and Smokey Bones, will begin trading on the Nasdaq on Jan. 30 with the symbol “TWNP,” the company said in a Thursday press release.
- Fat shareholders will receive 5% of TWNP. Fat Brands will retain the remaining shares following the distribution.
- The spinoff of Twin Hospitality Group will help Fat Brands deleverage its balance sheet, which includes $1.2 billion in debt. Twin Peaks will retain roughly $400 million of debt, Fat Brands Founder and Chairman Andy Wiederhorn said during the ICR Conference on Tuesday.
Dive Insight:
Fat Brands, which bought Twin Peaks in 2021 for $300 million, always kept the brand independent and maintained the chain’s own management team instead of integrating it like all the other brands it has acquired, Wiederhorn said.
“When we looked at the IPO market for Twin Peaks and then just the private equity market, we felt like the highest and best value for the Twin Peaks brand could be realized by taking it public,” he said. Wiederhorn previously said he believed Twin Peaks could be worth $1 billion to $2 billion as a public company.
With its IPO, Wiederhorn expects to raise $75 million. That money will go toward paying down Twin Peaks’ debt, leaving around $325 million in debt remaining.
The brand already has a significant pipeline and unit growth potential. By getting Twin Peaks locations open, its EBITDA will grow naturally and deleverage the business, Wiederhorn said in an interview with Restaurant Dive.
Twin Peaks expanded from roughly 80 units when Fat Brands bought it to 115 today, with more opportunities for growth. It has a pipeline of over 100 units, Wiederhorn said. The company is also in the process of converting 30 out of 60 Smokey Bones restaurants to Twin Peaks.
Twin Peaks has high average unit volumes at $6 million, with some delivering AUVs in the $9 million to $14 million range, according to an earnings call.
Last year, Twin Peaks opened nine locations and signed deals for 24 units. It also added new menu items, including scratch-made seafood dishes, an updated margarita menu and several new alcohol selections, according to a press release emailed to Restaurant Dive. Twin Peaks expects to open more than 10 restaurants by the end of this year.
Correction: A previous version of this article incorrectly listed Andy Wiederhorn’s title. He is chairman and founder of Fat Brands.
