Carrols to buy 278 Burger King restaurants
(Reuters) - Carrols Restaurant Group Inc (TAST.O) agreed to buy 278 Burger King restaurants in a cash-and-stock deal that will make the company the biggest Burger King franchisee in the world.
Currently the largest U.S. Burger King franchisee, Carrols will pay $15.8 million in cash and give a 28.9 percent stake in itself to Burger King, the two companies said in a statement.
Carrols, which has been operating Burger King franchises in the United States since 1976, will remodel about 450 restaurants over the next three-and-a-half years as part of the deal.
News of the deal sent Carrols shares up as much as 14 percent to $14.25 -- their highest in more than four years.
The deal is conditioned on the spin-off of Carrols' Fiesta restaurant business, and the company's ability to refinance its credit facility, among other things.
Carrols had announced the spin off of Fiesta Restaurant Group -- a unit that owns and operates the Hispanic-themed Pollo Tropical and Taco Cabana restaurants -- in February 2011.
With the Fiesta spin-off nearing completion, Carrols' Chief Executive Dan Accordino expects to focus on expanding the Burger King business.
Carrols, which is buying Burger King restaurants in Ohio, Indiana, Kentucky, Pennsylvania, North and South Carolina and Virginia, will own about 575 Burger King restaurants upon completion of this deal.
The company said the acquisition will close after the Fiesta restaurant spin-off, expected to be completed in April.
Burger King executives Steve Wiborg and Daniel Schwartz will join Carrols' board of directors as part of the deal.
Carrols plans to issue preferred stock to Burger King that will be convertible into 28.9 percent of the outstanding shares of its common stock.
Miami-based Burger King was bought by investment firm 3G Capital in October 2010. About 90 percent of its restaurants are owned and operated by independent franchisees.
Syracuse, New York-based Carrols' stock, which has soared 60 percent since it first announced the spin-off, closed at $14.09 on Monday on Nasdaq.
(Reporting by Meenakshi Iyer in Bangalore; Editing by Joyjeet Das)
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