SYRACUSE — Carrols Restaurant Group, Inc. (NASDAQ: TAST) has agreed to purchase 278 company-owned Burger King restaurants in Ohio, Indiana, Kentucky, Pennsylvania, North Carolina, South Carolina, and Virginia.
The transaction, spelled out in an asset purchase agreement, will make Carrols the largest global Burger King franchisee with 575 restaurants. Burger King Corp. will receive 28.9 percent equity interest in Carrols along with $15.8 million in cash payments in exchange for the restaurants.
Carrols will acquire the restaurants through its Carrols LLC operating subsidiary. The deal will not close until after Carrols completes a planned spinoff of its Fiesta Restaurant Group, Inc. subsidiary, which owns and operates Pollo Tropical and Taco Cabana restaurants.
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That spinoff should be complete in April, according to Carrols, which is headquartered at 968 James St. in Syracuse.
“With the spinoff of Fiesta nearly behind us, our sole focus as we move forward will be on expanding our Burger King business and leveraging our operating infrastructure to build shareholder value,” Carrols CEO Dan Accordino said in a news release. “We believe that there are significant opportunities for us to grow Carrols through acquisition and consolidation opportunities present within the Burger King system. This transaction, along with the close relationship that we are establishing with [Burger King Corp.], is a very exciting and pivotal step as we begin this journey.”
As part of the transaction, two Burger King executives, North America President Steve Wiborg and CFO Daniel Schwartz, will join Carrols board of directors. Carrols has also agreed to remodel about 450 Burger King restaurants over the next three-and-a-half years.
“We are very excited to further solidify our relationship with our long-time franchisee, Carrols Restaurant Group,” Wiborg said in a news release. “Carrols has a proven track record of running industry-leading restaurants and has demonstrated a long-term commitment to the Burger King brand.”
Carrols has operated Burger King restaurants since 1976. The company owned 297 Burger King restaurants as of March 23, 2012, making it Burger King Corp.’s largest franchisee in the United States. Including the soon-to-be spun off Fiesta Restaurant Group, Carrols operated a total of 546 restaurants in 17 states as of that date.
Burger King Corp. is privately held by 3G Capital, a global investment firm based in New York City. Burger King operates in more than 12,500 locations.
Contact Seltzer at rseltzer@cnybj.com
