NPC International Inc. announced today that it has entered into an Asset Purchase Agreement (APA) with a subsidiary of The Wendy's Company to acquire 22 Wendy's restaurants for $9.3 million, plus amounts for working capital and initial franchise fees.
NPC also agreed to acquire two additional restaurants currently under development by Wendy's in exchange for reimbursement of development costs and payment of initial franchise fees. As part of the agreement, NPC plans to reimage certain acquired restaurants in Wendy's new Image Activation format.
The units being sold by Wendy's include 14 fee-owned locations, which will be leased from Wendy's. This acquisition will be funded entirely with available cash reserves.
The restaurants will be owned and operated by NPC's wholly owned subsidiary, NPC Quality Burgers Inc.
The units to be acquired pursuant to the APA are located in the Kansas City, Mo., metropolitan area. According to information provided to NPC, 22 of the units to be acquired by NPC generated $32.7 million in net product sales during the 52 weeks ended Dec. 30, 2012. NPC expects the closing to occur in July 2013, subject to customary closing conditions.
"We are excited about the future prospects of Wendy's and the opportunity to partner with another great iconic American brand. This acquisition is an entry point into the Wendy's system from which we look forward to growing substantially through acquisition and development," said Jim Schwartz, chairman and CEO of NPC. "We firmly believe this opportunity plays well to our core competencies and positions NPC with significant growth runway when combined with our Pizza Hut interests."
Emil Brolick, Wendy's president and CEO, added that the transaction will be mutually beneficial for both companies.
"As part of our restaurant ownership optimization initiative, we are focused on recruiting successful, well-capitalized franchisees with strong operating credentials that are committed to our Image Activation reimaging program," he said.
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