Meritage Hospitality Group Inc. (OTCQX: MHGU), one of the nation’s premier restaurant operators, announced it has completed the acquisition of 20 Wendy’s restaurants located in Atlanta, Georgia.
The Wendy’s restaurants were acquired from a franchisee and are contiguous to the Company’s existing Wendy’s operations in Atlanta. Commenting on the acquisition Robert E. Schermer, Jr. CEO stated, “This transaction represents a case-model opportunity of our stated strategy to enhance shareholder value through consolidation and development in the Wendy’s franchise system. We intend to immediately install our web-based back of house operating and accounting systems to add real-time efficiencies at the restaurant level.”
The Company estimates the acquisition will add $25.6 million in annual sales and be highly accretive to earnings and EBITDA. The transaction was funded through a combination of cash on hand and an acquisition credit facility with First Franchise Capital Corporation, its primary financial partner. “No additional equity securities were required to be issued related to the acquisition,” added Mr. Schermer.
The Company plans to temporarily close the 20 restaurant locations for two days of equipment replacement and system upgrades while transitioning to the Meritage operating protocol. Following the restaurant re-openings, the Company will launch a building renovation cycle termed “Image Activation” in a majority of the acquired 20 Wendy’s restaurants. Image Activation is the new Wendy’s system design standard, including major interior and exterior restaurant upgrades, aimed at creating “A Cut-Above” guest experience.
Meritage has completed 12 acquisitions within the Wendy’s franchise system and continues to make significant investments into the brand. The Company owns and operates 141 quick service and casual dining restaurants in six states including Florida, Georgia, Michigan, North and South Carolina and Virginia.
Headquartered in Grand Rapids, MI the Company employs a workforce of approximately 4,000 people. The Company’s public filings can be viewed at www.otcqx.com under the stock symbol MHGU, or at the Company’s website, www.meritagehospitality.com.