Have you, like everyone else, seen BugerFi Gourmet Hamburger chains popping up all over the east coast of the United States and major cities in the mid-west? Their 125 locations, seem to be everywhere in 23 different states and their burgers are delicious.
The end of expansion is nowhere in sight for this Burger chain because as of BugerFi is going public via the SPAC stock (Special Purpose Acquisition Company) OPES Acquisition Corp (Nasdaq:OPES) which will boost capital within the company allowing them to open more BurgerFi locations across the US.
Do to the recent economic events it is expected BurgerFi like many restaurants will be struggling but with a strong brand plus a capital injection from this merger, it could give it the potential to get where they want to be in the future.
Key SPAC OPES Agreement Terms:
- $100m valuation from OPES Spac Stock to take the BurgerFi brand public to the Nasdaq exchange with ticker symbol BFI.
- Deal puts enterprise value of BurgerFi just under $150m
- Priced at 2.4x of 2021 Net Revenues
- Price to 2021 EBITDA of just under 14x (estimated 2021 EBITDA is $10.5m)
- Current shareholders get 6.6 millino shares of the new company (BFI) and wakl away with $30m in cash.
- New company will be set up with $50m in cash to use for expansion and an additional $30m possible from other select investors
Some of that capital will also be used to formalize a partnership established in May 2020 with REEF kitchens where 15 test kitchens across the country will be able to deliver BurgerFi burgers via delivery only instead of having a physical location.
This is crucial as it will allow BFI to test locations with REEF kitchens prior to opening up to new regions or states in attempts to be “The #1 Burger in Delivery.” (REEF Kitchens is backed by Softbank)
OPES SPAC Stock CEO Ophir Sternberg
This is what the Chairman of OPES acquisition Corp, Ophir Sternberg, had to say about the growth opportunities that BFI is testing, “Our team is thrilled to support the numerous growth initiatives, such as ghost kitchens, which allow for a significantly greater brand footprint and the ability to test new markets.”
The agreement between OPES Spac stock and BurgerFi was signed in early June 2020 and the deal is expected to close by start of the 4th Quarter, 2020. With a current market cap of under $100m and $12 stock price, this deal could be ripe for future upside potential if the BurgerFi chain, which was established in 2011 can continue its already 9 years of great success.
Is SPAC OPES A Buy?
OPES IPO date is still unclear but the stock will likely see continued volatility leading up the merger, making traders very excited! With the recent economic down turn this will add extra risk for long term investors.
Long term investors may also find this very attractive just for the opportunity of owning a large popular food chain before it’s IPO. We advise everyone to do there own homework to make sure you understand the risks involved before buying pre IPO companies.
A SPAC stock is defined as a “special purpose acquisition company” sometimes called a blank-check company these are stocks with with no commercial operations that are formed to raise capital through an IPO for the purpose of acquiring an existing company.