Burger King Corp. ("BKC") and Carrols Restaurant Group, Inc. (“Carrols”) (Nasdaq: TAST) today announced that they have entered into an asset purchase agreement for the purchase by Carrols (through its operating subsidiary Carrols LLC) of 278 BKC company-owned restaurants in the Ohio, Indiana, Kentucky, Pennsylvania, North Carolina, South Carolina and Virginia markets.
As a part of the transaction, Carrols will lead the Burger King system in its remodeling program by committing to remodel approximately 450 BURGER KING ® restaurants over the next three and half years, to the brand’s 20/20 restaurant image, which features a fresh, sleek, eye-catching design.
Carrols, the largest BURGER KING® franchisee in the U.S., is currently in the process of completing its spin-off to its shareholders of Fiesta Restaurant Group, Inc. ("Fiesta"), which owns and operates its Pollo Tropical ® and Taco Cabana ® restaurant brands. The acquisition of BKC's restaurants is conditioned upon, and is expected to close following the completion of, the spin-off as well as a financing to fund the restaurant remodeling program, cash paid to BKC in connection with the transaction and to refinance Carrols LLC’s existing senior secured credit facility. Upon completion of the transactions, Carrols will only operate BURGER KING ® restaurants and will become the system’s largest franchisee globally with 575 restaurants. Carrols anticipates that the spin-off of Fiesta will be complete in April.
- Total consideration to BKC will include a 28.9% equity interest in Carrols, after the spin-off of Fiesta, and total cash payments of approximately $15.8 million. The cash consideration is for refranchising fees of $9.4 million, inventory of approximately $2.5 million and payments to be made over five years by Carrols in conjunction with BKC's assignment to Carrols of its right of first refusal on sales of BURGER KING ® restaurants by existing franchisees in 20 states.
- Carrols will lead the BURGER KING ® system in its restaurant remodeling program with commitments to remodel approximately 450 restaurants over the next three and half years.
- BKC’s President, North America Steve Wiborg and Chief Financial Officer Daniel Schwartz will join Carrols’ Board of Directors upon completion of the transaction.