Presently, the stock of The ONE Group Hospitality, Inc. (NASDAQ: STKS) is undergoing a notable surge of 23.44% on the US stock charts, currently trading at $4.95. This upward movement in the current session can be directly attributed to a recent acquisition announcement made by the company.
The ONE Group (STKS) has declared its intention to acquire Safflower Holdings Corp., which is the proprietor of Benihana Inc., a prominent operator of distinctive experiential brands. Benihana Inc. holds the distinction of being the sole national teppanyaki brand in the United States, along with owning RA Sushi. This transaction is valued at $365 million and will be financed through $160 million in preferred equity, along with a segment of a newly established $390 million term loan and credit facility.
Following the completion of this transaction, expected by the conclusion of the second quarter of 2024, The ONE Group will extend its global presence to encompass 168 venues. These venues will span full-service entertainment and grill restaurants, representing the company’s four unique experiential brands. Established in 1964, Benihana has left an indelible mark in the United States, pioneering two distinct restaurant brands renowned for their emphasis on high-quality cuisine and unmatched guest service.
The flagship brand, BENIHANA, is a trailblazing entity and an icon of American culture, introducing interactive teppanyaki dining to the American market. Meanwhile, RA SUSHI distinguishes itself by offering inventive sushi and Japanese delicacies within a lively dining environment characterized by a vibrant atmosphere and energetic ambiance. Presently, Benihana operates 88 company-owned restaurants and oversees an additional 17 venues through franchising or licensing agreements in the Americas.
Upon completion, this acquisition is projected to contribute approximately $575 million in annualized system-wide revenue and around $70 million in annual run-rate EBITDA before accounting for synergies, which are estimated at $20 million annually. The company anticipates that it will take 24 months post-closing to realize these synergies, ultimately boosting the pro forma annualized run-rate EBITDA to over $135 million. Furthermore, the transaction is anticipated to have an immediate positive impact on earnings per diluted share.
This strategic acquisition of a distinctive restaurant platform boasting a compelling financial profile aligns with STKS’s overarching strategy to strengthen and diversify its leading portfolio of premier experiential VIBE restaurant concepts.
