Arby's, an Atlanta-based roast beef sandwich shop considered the U.S.' second-largest quick service chain, was acquired by Roark Capital Group for approximately $430 million. Roark, also of Atlanta, is a private equity firm with a focus on franchises and restaurant companies.
"This transaction provides substantial value to our stockholders, as it is expected to be accretive to earnings, deleverage the balance sheet and allow us to devote our full attention and resources on the exciting growth opportunities we have at Wendy's," according to Roland Smith, Wendy's/Arby's Group president and chief executive officer. "These opportunities include revitalization of our core menu, expanding breakfast, modernizing our facilities, building new restaurants in the United States and pursuing global expansion."
The sale marks the achievement of a well-planned effort as the ownership group has long sought to reduce its involvement in Arby's. CNN reports Wendy's is aiming to better compete with McDonald's (MCD) and Burger King.
When the deal closes, Wendy's will receive about $130 million in cash while also holding on to 18.5 percent of the roast beef chain's common stock interest, which is worth about $30 million.
Roark will take on about $190 million of the debt held by Arby's, much of which revolves around obligations germane to capital lease and sale lease back.
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