June 3, 2015

Colorado breakfast restaurant acquired, expanding

Eggs BenedictIf you’re a Colorado culinary arts school student, then you’re probably already aware of the fact that the Centennial State has no shortage of incredible breakfast restaurants. So intense is the foodie culture in Colorado that the competition among these establishments can be fierce, often fueled by deals and negotiations not seen by the average brunch-goer. Still, the business side of the equation is just as important as the eggs benedict you order every Sunday, and that was recently evidenced by a deal between two popular restaurant and hospitality companies in the area. According to multiple sources, The Egg and I, a collection of restaurants spanning across Colorado and several other states, was recently purchased by First Watch Restaurants, another hospitality group.

The Egg and I
The Egg and I has become something of a fixture in Colorado, particularly for brunch enthusiasts. The first restaurant operated under this name, according to The Street, a business magazine, was opened in Fort Collins in 1987. That restaurant quickly became popular with locals and tourists alike for its classy but simple brunch options, and the chain began expanding. Now, the restaurant groupĀ operates over 110 restaurants. While a large percentage of the restaurant group’s sedentary locations are still in Colorado, The Egg and I has also expanded to gain a presence in 20 other states. According to several sources, the group being acquired won’t stop it from expanding, and several locations are planned to open later this year in Texas, Virgina and North Carolina.

First Watch
The purchasing entity in this transaction, First Watch is another culinary group with regional notoriety in the Southwest, among other areas. While First Watch does not have quite as longstanding a history as The Egg and I, the company has been growing rapidly for several years. That growth appears to be showing no signs of stopping anytime soon, as this acquisition will create a veritable superpower in the brunch industry out of First Watch. The company has been looking to grow aggressively. It changed ownership itself in December 2011 via a purchase by the private equity firm Freeman Spogli & Co. It is estimated that via the acquisition of The Egg and I and plans for the opening of new restaurants, First Watch will operate more than 280 different locations in more than 25 states by the end of 2015.

The deal
The actual acquisition has not been made clear in the public eye, as The Bradenton Herald reports that the sum offered by First Watch to purchase The Egg and I is undisclosed. It seems fair to assume, though, that any acquisition such as this, which could immediately vault a company into an industry-leading position, would come with a heavy price tag. The Sarasota Herald Tribune has reported that The Egg and I restaurants will not immediately rebrand with the First Watch name, but will instead continue to operate as they have been during a transitional period. Whether or not rebranding will come in the future remains to be seen. In speaking with The Herald Tribune, Ken Pendrey, CEO and President of First Watch, explained the motivation for the acquisition.

“The Egg and I is a wonderful concept with a loyal following that has experienced tremendous growth, particularly over the last several years. We saw this acquisition as an opportunity to immediately and significantly expand our presence in markets where we don’t currently operate.”