Carrols Restaurant Group, Inc. (“Carrols”) (Nasdaq: TAST) today announced that it has completed the acquisition of 278 BURGER KING ® restaurants from Burger King Corporation (“BKC”). The acquired restaurants are located in the Ohio, Indiana, Kentucky, Pennsylvania, North Carolina, South Carolina and Virginia markets. Carrols, which operates 574 BURGER KING ® restaurants following the acquisition, is the brand’s largest franchisee, globally.
Total consideration to BKC included a 28.9% equity interest in Carrols (subject to certain limitations as previously disclosed) and total cash payments of approximately $16.2 million. The cash consideration was for refranchising fees of $9.4 million, inventory and cash of approximately $2.9 million and payments to be made over five years in conjunction with BKC's assignment to Carrols of its right of first refusal on franchisee sales of BURGER KING ® restaurants in 20 states. With the completion of the transaction, BKC’s President, North America Steve Wiborg and Chief Financial Officer Daniel Schwartz have also joined Carrols’ Board of Directors.
Dan Accordino, Chief Executive Officer and President of Carrols Restaurant Group, Inc. said, "This transaction significantly expands the scope of our operations, adds a number of new markets to our existing footprint and strategically positions us for future expansion. Our near-term focus will be on integrating the acquired restaurants and realizing the considerable opportunities to improve their operating and financial performance. Longer term, we look to expand and further build shareholder value through the acquisition and consolidation opportunities that we believe are present within the BURGER KING ® system. This transaction, along with the close relationship that we have established with BKC, is an important part of this strategy."
As separately announced, Carrols today also completed a financing in which it raised funds used to refinance its existing debt, to fund the cash consideration for the acquisition and to undertake the remodeling and transformation of over 450 restaurants over the next three and a half years.