We’ve written before about the major 2010 wave of financial buyers (i.e., private equity) taking advantage of depressed prices for restaurant companies.  Could the strategic buyers (i.e., other restaurant companies) now be coming out of the woodwork?

Of course, the major news on this front is the Claim Jumper situation, with Landry’s potentially stepping in over a presumed low-ball PE offer.  Darden has also pronounced themselves “open to acquisitions”, which typically means “looking right now”.

Like the financial buyers, strategic buyers will need to turn around ailing companies quickly.  Neither private nor public investors have patience for long-term turnarounds in a fast-changing space like restaurants.  Many strategies will be the same, such as a more sophisticated view of menu and promotion economics.  But we believe some of the strategies for strategic buyers must be a little different, e.g.:

• Greater focus on capital investments to increase the purchased brand’s relevance
• Leveraging marketing, promotional, and operations tactics across brands
• Overhead reduction from shared services, purchasing deals, etc.

What isn’t different, between financial and strategic buyers, is the need to rigorously measure the impact of actions on real guests.  Too often, a strategy is set and blindly followed.  By testing tactics to understand the true impact, buyers of both sorts can rapidly adjust to ensure the ship is actually turning in a better direction.