Dine Brands Agrees to Acquire Fuzzy's Taco Shop

Dine Brands Global, Inc. (NYSE: DIN), the parent company of Applebee’s Neighborhood Grill + Bar and IHOP restaurants, today announced that it has agreed to acquire Fuzzy’s Taco Shop (“Fuzzy’s”) from Experiential Brands LLC, a wholly owned subsidiary of NRD Holding Company, for $80 million in cash. Fuzzy’s is a fast-casual restaurant concept serving Mexican favorites with a Baja twist. The transaction is expected to be immediately accretive to earnings. Net of tax benefits, the purchase price is approximately $70 million.

Founded in 2003 in Fort Worth, Texas, Fuzzy’s is a category innovator, offering a new twist on Mexican favorites at a value price point. With a clearly defined and compelling brand, Fuzzy’s is competitively differentiated with strong consumer awareness and net promoter scores. Fuzzy’s is led by a strong management team, including Chief Executive Officer Paul Damico, a 35-year industry veteran at FOCUS Brands, Moe’s Southwest Grill, and Global Franchise Group. Paul has been successful in the sustained growth of the brand and will continue to drive the future of Fuzzy’s under the Dine Brands umbrella.

"Fuzzy’s Taco Shop is a compelling business with a loyal customer base and a distinct identity. It is an attractive asset with a tremendous growth trajectory and will be a complementary addition to our highly franchised portfolio,” said John Peyton, Chief Executive Officer of Dine Brands. “By adding Fuzzy’s to the Dine Brands family, we are investing in a high growth concept as part of our longer-term growth agenda, which is aligned with our strategy to build shareholder value.”

Peyton continued, “Paul and his team have done a tremendous job creating a solid foundation for the business, as evidenced by its attractive financial profile and differentiated brand positioning within its segment. We are eager to work with Paul and his leadership team as we execute on accelerating Fuzzy’s growth.”

Fuzzy’s, with 138 restaurants in 18 states, has long-term development agreements currently in place to nearly double its current restaurant base over time. 98% of Fuzzy’s current system is franchised and its strong unit economics attract franchisees to open more restaurants. The brand is expected to generate approximately $230 million in systemwide sales in 2022.

A supplemental presentation with more details on the transaction is available at investors.dinebrands.com.

“I’m incredibly proud of the work the Fuzzy’s team and franchisees have accomplished over the past few years, which has enabled us to enter this new chapter of growth together with Dine Brands,” said Paul Damico, CEO of Fuzzy’s Taco Shop. “With Dine Brands’ substantial industry resources, we will be well positioned to build upon our proven successes and accelerate our growth.”

Centerview Partners LLC acted as exclusive financial advisor and Sidley Austin LLP acted as legal advisor to Dine Brands on the transaction. Arlington Capital Advisors served as exclusive financial advisor to Fuzzy’s Taco Shop and Cheng Cohen LLC served as legal advisor to Fuzzy’s Taco Shop and NRD Holding Company on the transaction.