Carrols Restaurant Group Inc. said it completed the acquisition of 278 company-owned Burger King restaurants, making the Syracuse, N.Y.-based operator the largest franchisee of the quick-service chain in the world.
The deal, which was revealed in March and includes locations in Ohio, Indiana, Kentucky, Pennsylvania, North Carolina, South Carolina and Virginia, gives Carrols a total of 574 Burger King outlets.
Carrols also said it completed a $150 million offering of 11.25-percent senior secured second lien notes and entered into a new $20 million revolving senior credit facility that will be used to fund the $16.2 million cash portion of the acquisition.
In addition, the new credit facility will be applied toward the remodeling of more than 450 Burger King locations over the next three and a half years and the refinancing of existing debt, the company said.
As a part of the acquisition, Miami-based Burger King Corp. received a 28.9-percent equity interest in Carrols. Burger King Corp. North American president Steve Wiborg and chief financial officer Daniel Schwartz have joined Carrols’ board of directors.
The deal also gives Carrols the right of first refusal on Burger King franchise sales in 20 states, for which the company will make payments over the next five years.
“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,” said Carrols president and chief executive Dan Accordino. “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,” he said, “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.”
In May Carrols also completed the spin-off of Fiesta Restaurant Group Inc., an indirect wholly owned subsidiary comprising the Pollo Tropical and Taco Cabana fast-casual brands.
Contact Paul Frumkin at [email protected].