ORLANDO, Florida – Macaroni Grill Romano may soon have a third brand under its platform. The company has an acquisition in works that could be closed by the end of the first quarter if everything goes well, CEO Nishant Machado said in an interview with Restaurant Dive on Tuesday during an ICR conference.
“I think we have the potential to become a company with a budget of $ 1 billion, based on the infrastructure and team that we created,” he said. “With this acquisition, we maybe halfway there.”
This very far from where the brand stood in 2017 when Machado took over as CEO. The company went out of bankruptcy and closed 37 units after several years of recession in one store. His task was to develop a revolving strategy.
The company put together a team that was better prepared to think through potential acquisitions and the value this brand could bring. In 2018, Macaroni Grill increased sales in the same stores after several years of negative purchases and acquired Sullivan’s steakhouse from Del Frisco for $ 32 million.
According to Machado, a potential acquisition this quarter will be a transforming brand that will work well in the full-service sector and will match Macaroni Grill and Sullivan’s.
According to him, during the first quarter of 2019, within the framework of Macaroni Grill, Sullivan spent one of the best years in terms of sales in one store and profitability over the past decade.
In the future, the goal of the acquisition of the company is full-service brands that have from 35 to 65 units. Good average volumes of units, and somewhat stable performance in general. According to Machado, he will consider ineffective brands if Macaron has a strategy.
“We aim to be smart and continue to add concepts that, in our opinion. It can increase the overall value of the enterprise.
Capitalizing on organic growth drivers
In addition to acquisitions, the company plans to develop both existing brands organically. According to Machado, for Macaroni Grill, the company is exploring light asset models by licensing and expanding its international presence. For example, this year, it planned to permit drinks and ready-to-eat foods, he said.
The company has also found many opportunities for “white space” for Sullivan and focuses on A-locations in level B markets. Thus, instead of targeting Chicago, it is located in a suburb of Naperville, Illinois. Which matches the company’s brand name – a steak house next door, he said.
Machado expects to build more units in these markets in the future. At the same time, enter the international space. He signed his first franchise agreement in Asia and travels to the Philippines. Which, in his opinion, is a way to enter the Asian region.
According to him, in 2020, growth within the airport will also become an important aspect for Macaroni Grill.
In the future, the company will focus on using its core asset, Macaroni Grill. While growing Sullivan and acquiring strategic acquisitions based on the existing platform, he said.