The Meditteranean brand Cava announced that it will be acquiring its competitor Zoës Kitchen for $300 million, or for roughly $12.75 per share.
Will one of these fast casual chains become the Panera of the Mediterranean market?
It appears as though Ron Shaich, Panera Bread's founder, and former CEO is betting on it.
The Cava Group is getting its fund investment for the acquisition from Act III Holdings which is led by Shaich.
When it comes to the Mediterranean category, there's a lot of potential for growth. The fast casual segment has become saturated with pizza, Mexican, and burger concepts all competing for the same millennial consumer. However, there is a small percentage of Mediterranean fast casual chains competing in this space.
Cava, which is a spin-off concept from the full-service restaurant Cava Mezze, has grown over 70 percent over the past three years. There are now 327 Cava stores.
We visited Cava back when it only had 25 units. Check out the video below to hear Cava Founder and Chef Dimitri Moshovitis as he shared with us some of the tricks to Cava’s success.
Although Cava is on the rise, not all Mediterranean-style restaurant chains, including Zoës have been as successful.
"Competitor Noon Mediterranean, formerly Verts Mediterranean Grill, filed for Chapter 11 bankruptcy protection earlier this week and even Zoes has struggled," writes "CNBC." "In the first quarter, Zoes posted a net loss of $3.6 million, and saw sales its restaurants open at least one year fall 2.3 percent. Zoes saw a stretch of same-store sales declines throughout 2017, which followed a period of rapid expansion that resulted in high employee turnover at its restaurants and managers who had less experienced than needed."
Does Cava Group have what it takes to take Zoës Kitchen to the next level?
“This truly allows us to reach guests in all markets, whether it is the coast or in-between,” said Brett Schulman, CAVA CEO in an interview. “We’re looking forward to learning more about the Zoe’s business and understanding how we can apply a lot of the digital capabilities we’ve built through the years at CAVA."
Read more about the big fast casual merger at "Reuters."