Competition for deals is heating up, especially in foodservice where valuation multiples can sit at 10x EBITDA and higher. This intensity might motivate some dealmakers to take an expedited path to closing, but a diligence process that surfaces red flags and identifies value-accretive actions is more necessary than ever.
The sophisticated nature of most restaurant and hotel food and beverage operations, which combine all the challenges of the retail sector with the complexities of manufacturing, logistics, and technology makes properly assessing investment targets more difficult — and more essential.
Without specialized knowledge of how consumers and the market are moving, a general due diligence assessment may remain focused solely on the top and bottom lines, rather than surfacing the factors that really drive performance. It’s not only about whether a target is in strong financial health, but also if it can compete effectively over the next 3-5 years.
Our services span from targeted analysis to fully integrated due diligence. On every project, we work to determine a target’s full potential and provide a clear post-acquisition strategy.
Aaron Allen & Associates works exclusively in the foodservice industry, helping restaurant and hotel operators, foodservice tech companies, and investors find, size, and seize opportunities to maximize value creation. Our deep sector knowledge allows us to go beyond financial analyses and projections, uncovering the factors that will drive deal success.
We’re not theorists—we’re practitioners. Our team has worked across all functional foodservice areas from kitchens and host stands, to marketing departments, and supply chain management. We know how foodservice works, providing clients with invaluable insights into a target operation’s current state and future potential.
A spreadsheet only goes so far in capturing how well a foodservice business is run. We leverage our industry expertise during site visits where we can evaluate day-to-day operations in order to surface obstacles to value creation and find opportunities to develop system efficiencies.
Our past and present clients have operations on six continents, giving us unparalleled experience in varied market conditions. We fuse this global exposure with local expertise, highlighting all the challenges and possibilities that come from a cross-border deal. Our regional knowledge and culturally aware approach also lends our clients the sensitivities and nuance sometimes necessary to complete complex cross-border transactions.
We believe that every aspect of a foodservice operation — from the menu, service, and brand down to the POS system, training procedures, and labor models — contributes to its market share and longevity. This holistic approach to the business means our clients understand risks and rewards of a deal early in the diligence phase, leading to sure-footed decision making and bullet-proof post-merger integration plans.
We help executive teams bridge the gap between what’s happening inside and outside the business to align their strategy with the forces reshaping the industry — ranging from market research and strategic planning to mergers & acquisitions and advisory services for both buy- and sell-side transactions.
Looking for advice on a restaurant transaction? Let’s get in touch.