News

Roark Capital completes Arby's acquisition

July 5, 2011

Atlanta-based Roark Capital has completed its second restaurant buyout in as many months with the finalization of its acquisition of Arby’s Restaurant Group Inc. for an estimated $130 million in cash and assumed $190 million of Arby’s-related debt. 

“The sale of Arby’s provides substantial benefits to our stockholders and we are pleased to have worked with Roark Capital on its successful completion,” said Roland Smith, president and CEO of The Wendy’s Company. “We congratulate Roark on the Arby’s acquisition and are we are pleased to retain an 18.5 percent common stock interest in the Arby’s business. We believe in Arby's turnaround and look forward to being able to benefit from the brand’s future successes.”

Executives at Roark are already planning extensive changes for the brand, including the launch of a new version of Arby’s Angus sandwiches this fall and the relaunch of the chain’s MarketFresh lineup.

"We are thrilled to be part of their team because of their incredible experience in franchising," said Hala Moddelmog, president of Arby's, in the Atlanta-Journal Constitution. "They know what we're up against and what we're about. And we also like their ability to build brands."

Arby’s has seen its sales fall in recent years, exacerbated by the recession. About 70 percent of its 3,600 stores are franchised.

In June of last year, Arby’s announced a major development agreement with Tab Gida Sanayi ve Ticaret A.S. to open at least 100 Arby's restaurants in Turkey over the next 10 years, including 50 during the next five years. The restaurants will join eight others already in operation by Celebi in Turkey, which Tab Gida purchased as part of a separate agreement between the two organizations.

In connection with the transaction, Wendy’s has changed its corporate name to The Wendy’s Company. Its common stock will continue to trade on the New York Stock Exchange under the ticker “WEN.”

Former Arby’s owner Nelson Peltz merged the two chains in 2008 under Trian Fund Management LP, which was the largest Wendy’s/Arby’s shareholder as of March 31. The merger was part of a $2.56 billion all-stock deal; however, Wendy’s/Arby’s shares have dropped 23 percent since it closed.

Last month, Roark finalized its purchase of Il Fornaio (America) Corporation, owner of Corner Bakery Cafe and Il Fornaio Restaurants and Bakeries.