LOS ANGELES - FAT Brands Inc. (NASDAQ: FAT), a global franchising company, has confidentially filed a registration statement with the Securities and Exchange Commission for the potential spin-off of its Twin Peaks and Smokey Bones restaurant brands into a separate public entity.
The successful completion of this transaction is contingent on several conditions, including the SEC's declaration that the registration statement is effective and the final approval from FAT Brands' board of directors.
The company, which owns 18 different restaurant brands and oversees more than 2,300 units across the globe, is considering this move as a strategic effort to enable the Twin Peaks and Smokey Bones brands to operate independently. Twin Peaks, known for its sports lodge atmosphere and made-from-scratch menu, has been expanding and is nearing 115 locations in the United States and Mexico.
The announcement indicates that the company is exploring new growth avenues for its brands, although the press release emphasized that this does not constitute an offer to sell or a solicitation of an offer to buy any securities. The details of the transaction remain confidential, and there has been no indication of the timeline for the potential spin-off.
Investors and stakeholders have been advised that the press release contains forward-looking statements, which are subject to various risks and uncertainties. These statements are not guarantees of future performance, and actual results could differ materially from those projected.
The news of this potential spin-off comes as FAT Brands continues to develop and market a diverse portfolio of dining concepts. The company's collection ranges from fast casual to polished casual dining establishments, including notable names like Round Table Pizza, Fatburger, and Johnny Rockets.
This move to potentially separate Twin Peaks and Smokey Bones from the FAT Brands portfolio reflects the company's ongoing efforts to optimize its business structure. The information about this strategic decision is based on a press release statement from FAT Brands Inc.
InvestingPro Insights
As FAT Brands Inc. (NASDAQ: FAT) prepares for the possible spin-off of its Twin Peaks and Smokey Bones restaurant brands, investors are closely monitoring the company’s financial health and market performance. According to InvestingPro data, FAT Brands has a market capitalization of approximately $92.06 million. Despite the challenges, the company has managed to maintain a significant revenue growth, with the last twelve months as of Q1 2024 showing a 26.77% increase to $526.73 million USD.
One of the key InvestingPro Tips for FAT Brands is its substantial dividend yield, which stands at 10.53%, as of the latest data. This is a testament to the company's commitment to returning value to shareholders, having raised its dividend for 3 consecutive years. Another tip points out that analysts are expecting sales growth in the current year, which may provide some optimism for the company's future despite its significant debt burden and the recent poor performance in stock price, which has taken a substantial hit over the last week, month, and three months.
For investors looking for more depth and additional InvestingPro Tips, FAT Brands has 15 more listed on InvestingPro, accessible through the specific link for the company. These tips can give investors a more comprehensive view of the company's financial situation and market potential. Interested readers can also take advantage of the special offer by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
While the potential spin-off of Twin Peaks and Smokey Bones could unlock value and provide new growth opportunities for FAT Brands, the company's current financial metrics and market performance will be crucial factors for investors to watch in the lead-up to the transaction's completion.
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