Biggest name in Minnesota barbecue, Famous Dave's, is bought by Canadian firm for $200M

Minnesota's most famous barbecue chain is going Canadian.

Montreal-based MTY Food Group Inc. is buying the company that owns the Famous Dave's barbecue chain in a $200 million deal announced Tuesday.

BBQ Holdings Chief Executive Jeff Crivello said the Minnetonka corporate office and its 75 employees will remain and he expects to stay on in his role.

Founder "Famous Dave" Anderson remains a consultant. In an interview Tuesday, he said the chain's St. Louis-style spareribs and Texas beef brisket will remain true to his recipes.

"Famous Dave's doesn't happen in the corporate office," Anderson said. "The spirit of Famous Dave's is really in the restaurant."

Minnetonka-based BBQ Holdings Inc. will become a subsidiary of MTY, which is paying $17.25 a share, about 40% above BBQ's closing price on Monday. When the deal is completed, shares of BBQ Holdings will be delisted from the Nasdaq stock exchange.

As a subsidiary of MTY, Crivello expects BBQ Holdings to continue acquiring new chains, filling unused capacity with ghost kitchens, and evolving Famous Dave's with smaller-sized locations than its traditional sit-down restaurants.

"Our business model has always been growth from three different angles," he said.

When Crivello joined Famous Dave's as CEO in late 2017, the company had seen a procession of six chief executives in five years. Its stock price was around an all-time low at about $3.65.

Since then, the company survived the pandemic shutdowns by turning to takeout, ghost kitchens and financial aid from the government. Its stock hit a five-year peak of around $18 in June 2021.

The company reported Tuesday that its adjusted earnings in the three months ended July 3 was 31 cents a share, up from 18 cents a year earlier. Revenue was up 76% to about $80 million, reflecting a comeback from the pandemic.

Before becoming chief executive, Crivello served as chief financial officer at PW Partners Capital Management, a hedge fund that then acquired about $1.5 million in Famous Dave's shares in 2017. Soon after joining Famous Dave's, he began consulting with founder Anderson about ways to boost its appeal.

"Jeff is the only one that has been able to transform current restaurants," Anderson said. "He made the hard decision when restaurants weren't making it to close them and he knew he had to restructure larger boxes into smaller ones that were labor light."

BBQ Holdings now operates more than 200 franchised and more than 100 corporate-owned restaurants across 37 states in the U.S., Canada and United Arab Emirates. The company purchased several other franchise chains in recent years, including Baker's Square, Barrio Queen, Granite City, Tahoe Joe's and Village Inn.

MTY is a franchiser of around 80 restaurant brands — including Papa Murphy's, Cold Stone Creamery and Planet Smoothie — with 3,900 locations in the U.S. It gets revenue from another 3,000 or so franchised restaurants in Canada and other parts of the world.

"We are excited about the prospects of adding BBQ Holdings' brands to the MTY family and we look forward to welcoming Jeff Crivello and his team and their franchise partners," said Eric Lefebvre, chief executive of MTY, in a statement.

Anderson opened the first Famous Dave's in Hayward, Wis., in 1994. He left the company in 2002 when President George W. Bush appointed him assistant secretary at the Department of the Interior's Indian Affairs office.

In recent years, Anderson focused on another barbecue concept named after his father, called Jimmie's Old Southern BBQ Smokehouse. It has a location in Minneapolis and in Wisconsin.

Anderson sees the change in Famous Dave's ownership as part of the journey. "For me, it's like watching your son or daughter graduate from college and you just have hope for the future," he said.