Posts Tagged "restaurant investment"

Restaurant EBITDA

The restaurant industry can be mighty unforgiving, thanks to thin margins and high operating expenses. EBITDA (earnings before interest, taxes, depreciation and amortization) plays a crucial role, as it is designed to help owners and operators place a firm value on their restaurant company’s earning power by focusing on cash flow. Below, we examine how restaurant EBITDA differs from operating…read more →Read more...

Restaurant Debt Ratios

The restaurant industry is a diverse one — and with so many different types of companies (large, small, franchised, company-owned, etc.), the indebtedness of chains varies widely. Investors often monitor this indebtedness to navigate the risks (and, in many cases, rewards) associated with the chains themselves. Recent bankruptcies further highlight the risks faced by equity holders when it comes to…read more →Read more...

2017 Restaurant Mergers and Acquisitions: An Update

Recent data suggests that restaurant mergers and acquisitions (M&A) are set to continue growing, both in number and in value. In fact, the number of restaurant M&A deals in the US increased by 86% between 2004 and 2016. Recently, we’re seeing specific pockets of the industry benefit from restaurant mergers and acquisitions. Premium coffee has been given a boost with…read more →Read more...

The Most Common Restaurant Commercial Due Diligence Findings

Private Equity firms have been snapping up restaurant chains at an astounding rate in recent years. It makes sense, considering the industry is cash-generative, offering a continual source of new concepts that can be scaled and eventually sold, generating lucrative returns. And while those in the financial and banking sectors often perform the due diligence on those deals, a firm…read more →Read more...

Restaurant Valuation Multiples: Global Trends

As Private Equity activity continues to flourish in the foodservice sector, restaurant valuation multiples have followed suit — rising even when deal volumes drop. Premiums for high-quality targets are on the rise, with valuations reaching their highest multiple (11.1x) since 2007 in 2016. There are plenty of opportunities for restaurant operators searching for capital — particularly those in higher growth…read more →Read more...

The Largest Restaurant Acquisitions of the Past Two Decades

In 2015, estimates pegged the value of restaurant mergers and restaurant acquisitions (M&A) in the US at roughly $120.8 billion, jumping 58% from the previous record the prior year. In 2016, the value of those deals was down some 23%, but the number of deals was up, with restaurant deals comprising 1.1% of all (13,142) M&A deals. Between 2004 and…read more →Read more...

Glossary of Restaurant Investment Terms

Though restaurant IPOs have remained elusive in recent years, investment into both restaurant chains and restaurant technology remains on the rise. Funding to the restaurant delivery space, for instance, reveals that there remains plenty of opportunity on the horizon. Restaurants and restaurant technology companies often turn to Private Equity and Venture Capital in their quest for expansion. The biggest restaurant…read more →Read more...

A Look at Global Restaurant Investment Banks

The food and beverage investment banking coverage group has proved attractive for investors in recent years. Changing demographics, shifting consumer habits, and household income are some of the key drivers for the food and beverage sector — and investment banks have taken note. Higher income levels and longer lifespans have lead to a greater interest in healthful and nutritious foods….read more →Read more...
12