One Group Hospitality buys Benihana parent for $365M

Dive Brief:

One Group Hospitality acquired Safflower Holdings, owner of Benihana Group and RA Sushi, for $365 million, the company said in a press release Tuesday. The transaction is expected to close by the end of the second quarter.
The deal will be financed by $160 million in preferred equity and a portion of a $390 million term loan and credit facility.
Benihana, which has 88 company-owned units, will add $514 million in trailing 12-month revenue and about $70 million in annual run-rate EBITDA to One Group’s balance sheet. The acquisition marks the first transaction One Group has made since it bought once-bankrupt Kona Grill in 2019 for $25 million.

Dive Insight:

This transaction represents significant growth potential for One Group. It will more than double One Group’s current venue count, which is currently at 63 split between brands STK and Kona Grill, to 168. Systemwide revenue will increase to over $1 billion from $436 million, according to the press release.

“With Benihana joining The ONE Group’s platform, our combined annualized EBITDA enhances our ability to continue to fully fund our expansion while delivering meaningful free cash flow enabling debt reduction and shareholder friendly capital allocation to drive long-term value for shareholders,” One Group CEO and president Emanuel Hilario said in the press release.

Benihana will open nearly a half-dozen locations this year. It launched a 1,280-square-foot Benihana RA Sushi fast casual restaurant in Miami in February, which offers dine-in, takeout and delivery. It plans to open another Benihana RA Sushi in Miami in mid-2024 and an RA Sushi in Plantation, Florida, this summer. A traditional Benihana restaurant will open in San Mateo, California in late 2024.

This deal marks the second-largest acquisition among restaurant companies this year. The biggest transaction so far is RBI’s planned acquisition of its largest franchisee, Carrols Restaurant Group, for $1 billion. Chains such as Tropical Smoothie Cafe and Chuck E. Cheese are rumored to be considering sales as well.