Fortress Investment Group Acquires Krystal
Various industries across the world are experiencing an economic downturn caused by the coronavirus pandemic. The restaurant industry has taken a hard hit as it has experienced 8 million job losses since the start of this pandemic. Krystal, a well-established chain of fast-food restaurants, felt this economic pinch that drew it to file a bankruptcy petition in January 2020. Fortress Investment Group won the bid to acquire this chain of restaurants for 48 million Dollars.
About Krystal
The management of Krystal recently admitted to having experienced a decline in sales. Krystal initially had 300 fast food units spread across different states. In December 2019, Krystal had to close about 44 restaurants in a bid to curb the economic difficulties it was already experiencing. By January, its sales had declined by 16 percent and its unit volume by 12 percent. The decline in the numbers forced Krystal to file for bankruptcy, with about 65 million dollars in secured debt.
Fortress Investment Group Won the Acquisition Deal
This is where the Fortress Investment Group came in. Fortress is an investment management firm based in New York. It won the bid to acquire Krystal after several potential bidders backed away from showing their interest in buying this fast-food company. Many bidders feared the negative impact of the pandemic on the restaurant industry, which was their main reason for backing away from the acquisition deal.
However, this investment management firm from New York believed in Krystal’s potential and decided to buy it for 48 million dollars. Fortress is one of Krystal’s senior lenders, and it purchased the company with 27 million dollars in debt and it further assumed 21 million dollars in liabilities.
Fortress Investment Group, as the new management at Krystal, hopes to get this fast-food company back to its feet.
As the adverse effects of the coronavirus pandemic continue to be felt across the globe. Experts predict more closures and a decline in sales for the restaurant industry. For this reason, they also warn of an increase in such distressed acquisitions throughout the year.
Learn more about Fortress Investment Group: https://en.wikipedia.org/wiki/Fortress_Investment_Group