The ONE Group's Benihana Acquisition: Building a Powerhouse in Experiential Dining

In a landmark deal that reshapes the upscale restaurant landscape, The ONE Group Hospitality Inc. (NASDAQ: STKS) is taking over Benihana Inc., marking a transformative moment for both organizations. The $365 million transaction will be funded through $160 million in preferred equity from Hill Path Capital and a fresh $390 million credit facility, with closing anticipated by Q2 2024.

Strategic Expansion Meets Culinary Heritage

Who owns Benihana now? As of closing, The ONE Group will become the steward of this iconic Japanese dining concept. Benihana, founded in 1964, stands as America’s defining teppanyaki brand, having pioneered interactive dining experiences that became a cultural touchstone. The acquisition reflects The ONE Group’s ambition to dominate the experiential dining segment by combining complementary restaurant platforms.

The combined entity will operate 168 venues globally, uniting The ONE Group’s existing portfolio—STK steakhouses (28 locations), Kona Grill (27 locations), and ONE Hospitality services (8 venues)—with Benihana’s 88 company-owned establishments and 17 franchised locations across the Americas. This creates an unparalleled network of high-energy, entertainment-focused restaurants.

Financial Impact: Numbers That Tell the Story

The transaction injects substantial scale into The ONE Group’s operations. Benihana will contribute approximately $575 million in annualized system-wide revenue upon closing, with trailing twelve months revenue adding $514 million to the combined business. More critically, the deal is projected to generate roughly $70 million in annual run-rate EBITDA before synergies.

The real value emerges through operational synergies—estimated at $20 million annually—which The ONE Group expects to fully realize within 24 months. Post-synergy run-rate EBITDA reaches beyond $137 million, fundamentally reshaping the combined company’s financial profile. The transaction is immediately accretive to diluted earnings per share.

Capital structure transformations dramatically post-closing: combined net debt escalates from $53 million to $295 million, while cash positions strengthen from $21 million to $55 million. Share count increases modestly by 1.7 million to 33.0 million shares outstanding.

Benihana’s Dual-Brand Strength

Benihana operates two distinctly positioned brands. BENIHANA® remains the category-defining teppanyaki concept, where chefs perform at tabletop grills, blending culinary artistry with entertainment. RA SUSHI® complements this with a bar-forward atmosphere emphasizing creative Japanese cuisine and specialty cocktails in vibrant, upbeat settings.

This portfolio diversity gives The ONE Group significant competitive advantages. Both brands transcend mere dining to create memorable experiences—precisely The ONE Group’s core strategy. The combination positions the merged entity to capture multiple customer segments and occasions, from corporate events at BENIHANA® to casual dining at RA SUSHI®.

Execution Timeline and Governance

Closing hinges on standard regulatory approvals and is slated for completion by June 2024. Scott Ross (Founder and Managing Partner of Hill Path Capital) and James Chambers (Co-Founder and Partner) will join The ONE Group’s board upon transaction close, providing strategic guidance through integration.

The financing structure includes Deutsche Bank Securities as sole financial advisor and lead arranger, with Stoel Rives providing legal counsel to The ONE Group. For Benihana, Piper Sandler served as financial advisor, with Sidley Austin and Akin Gump Strauss Hauer & Feld providing legal representation.

Strategic Rationale: Why This Deal Works

The acquisition addresses The ONE Group’s core objective: establishing itself as the preeminent global leader in VIBE dining—high-energy, experiential restaurant concepts that generate emotional engagement alongside meals. Benihana’s 60-year heritage and cultural cachet provide instant credibility, while its operational maturity de-risks the growth profile.

Free cash flow generation becomes immediately material. The combined business will produce meaningful cash surplus, funding debt reduction while enabling shareholder-friendly capital allocation strategies. This financial flexibility supports expansion in current markets and enables entry into adjacent categories.

Integration synergies span multiple vectors: procurement optimization across 168 venues, technology platform consolidation, marketing leverage, and operational best-practice sharing. The 24-month realization window reflects realistic implementation timelines for restaurant operations integration.

The Competitive Landscape

This deal positions The ONE Group to compete directly with larger casual-dining operators while maintaining premium positioning. The portfolio now spans modern steakhouses (STK), polished casual grills (Kona Grill), hospitality management (ONE Hospitality), Japanese teppanyaki (BENIHANA®), and contemporary sushi (RA SUSHI®)—a breadth that creates multiple revenue streams and reduces concentration risk.

The One Group’s broader platform now extends across the U.S., Europe, the Middle East, and the Caribbean, establishing genuine international scale within the experiential dining category.