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ARC to fill up restaurant unit with Tilted Kit
Posted on Wednesday, 07 November 2018 14:46
ARC Group is adding to its restaurant holding business, buying Tilted Kit Pub and Eatery for USD 10.00 million.
The acquiror will assume debt of USD 1.80 million, as well as USD 1.50 million in future payment obligations.
Under the terms of the transaction, which is expected to close by the end of 2018, ARC will also issue 1.40 million shares of common stock.
Tilted Kit posted around USD 14.00 million in revenue during 2017 and specialises in traditional pub dishes, hamburgers, and other fresh food, in a Celtic-themed environment.
The company will be added to the buyer’s existing portfolio including restaurant chains Dick’s Wings & Grill and Fat Patty’s, the latter of which was purchased in August for USD 12.30 million.
Richard Akam, chief executive of ARC, said: “Tilted Kilt will be a strong addition to our platform and a brand for which we believe we can make a significant impact in its top and bottom line growth.
“From 2013 to 2017, we improved the average unit volume of our Dick's Wings & Grill restaurants from USD 699,000 to USD 966,000.”
ARC also gains access to Tilted Kit’s 34 restaurants in 17 states across the US, including New York, New Jersey, Pennsylvania, California, Texas and Nevada, with a further eight facilities in production.
Seenu Katsuri, president of the buyer, said: “Upon closing, this will be the second restaurant chain that we have acquired this year and will boost ARC Group's combined annualised revenue run rate to in excess of USD 25.00 million.”
He adds that the purchase is part of the company’s strategy to target underperforming businesses and boost cash flow through marketing and other financial expertise, whilst reducing costs and expanding its margins.
Formed in 2000 to develop Dick’s Wings & Grill, ARC posted revenue of USD 1.20 million for the second financial quarter of 2018 ending 30th June 2018, a 7.0 per cent increase on USD 1.10 million for the corresponding period in 2017.
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