BurgerFi International undertakes strategic review to enhance company prospects amid liquidity challenges
BurgerFi International, Inc. (NASDAQ: BFI, BFIIW), a prominent player in the fast-casual dining industry, announced a comprehensive review of strategic alternatives aimed at bolstering the company’s prospects and ensuring stable management during this critical period. This initiative involves both the BurgerFi brand, known for its “better burger” concept, and Anthony’s Coal Fired Pizza & Wings, a high-quality casual dining pizza brand under its umbrella.
Formation of Special Committee and Financial Advisory
The Board of Directors at BurgerFi has established a special committee, composed of Directors, to oversee this strategic evaluation. To aid in this process, the company has retained Kroll Securities, LLC as its exclusive financial advisor. David Heidecorn, the newly appointed Chairman of the Board and a Senior Advisor to L Catterton, emphasized the board’s commitment to exploring all potential strategic alternatives to address the company’s liquidity issues and enhance stakeholder value. Heidecorn succeeds Ophir Sternberg, who resigned from his positions, including Executive Chairman, on May 23, 2024.
Financial Strategies and Forbearance Agreement
As part of its strategy to stabilize its financial standing, BurgerFi has entered into a Forbearance Agreement and the Seventeenth Amendment to its existing credit facilities with TREW Capital Management Private Credit 2 LLC. This agreement will prevent the secured parties from exercising their rights under the credit documents until at least July 31, 2024. Additionally, L Catterton and TREW have each committed to lending up to $2 million ($4 million in total) to support the company during this strategic review period.
Leadership and Retention Agreements
In an effort to maintain consistent leadership through these changes, BurgerFi has executed retention agreements with key executives including CEO Carl Bachmann and CFO Christopher E. Jones. These agreements are part of a broader effort to ensure that the company’s leadership remains focused and supported as they navigate through the strategic review process.
Company Outlook and Future Steps
BurgerFi International, Inc. operates 162 locations worldwide, encompassing both corporate-owned stores and franchises. The company’s review of strategic alternatives comes at a time when the fast-casual industry faces dynamic changes and significant competitive pressures. The outcome of this strategic review is uncertain, but the company’s proactive steps highlight a dedicated effort to surmount current challenges and reposition the brand for future success.
The company has stated that it will not provide ongoing comments about this review process but will make further announcements as required by ongoing disclosure obligations and applicable laws.