NPC International, Inc. Announces Agreement to Acquire 56 Wendy’s Units and Access Accordian Term Loan



NPC International, Inc. Announces Agreement to Acquire 56 Wendy's Units and Access Accordian Term Loan

NPC International, Inc. has entered into an agreement with the Carlisle Corporation and its affiliates to acquire 56 Wendy’s restaurants for $58.2 million, plus amounts for working capital. Included in the transaction are 20 fee owned properties, some of which the company plans to monetize in sale lease back or other transactions post-closing. As part of the transaction, NPC plans to remodel certain acquired restaurants in Wendy’s new Image Activation format.

The acquisition will be funded with $40.0 million of incremental term loan borrowings, borrowings from the Company’s undrawn $110.0 million revolving credit facility, and cash on hand. The restaurants will be owned and operated by NPC’s wholly-owned subsidiary, NPC Quality Burgers, Inc., which entered into the asset purchase agreement to acquire the restaurants.

The $40.0 million term loan borrowings are available under the $125.0 million accordion feature in the Company’s existing credit facility on terms similar to those paid to lenders under its current outstanding term loan. The consummation of the accordion exercise is subject to market and other customary conditions.

The units to be acquired are located in North Carolina and Virginia with a heavy concentration in the Greensboro-Winston Salem, North Carolina area. According to information provided to NPC, the units to be acquired by NPC Quality Burgers, Inc. generated approximately $77 million in net product sales during the 52 weeks ended December 29, 2013. NPC expects the closing to occur in mid to late July 2014, subject to customary closing conditions and Wendy’s approval of the transfer.

Jim Schwartz, Chairman and CEO of NPC International, Inc. said, “We are excited to expand our presence in the Wendy’s system and to establish a toe-hold in the Mid-Atlantic region from which we can grow. We are also fortunate to be acquiring these stores from the Carlisle Corporation, a long tenured, well respected and continuing Wendy’s operator.

This acquisition will be our fourth acquisition in the Wendy’s system since our initial foray into the system in July of last year. Our Wendy’s holdings, including this acquisition, will total 146 restaurants with revenues approaching 15% of our total consolidated revenues. We look forward to continuing to grow in the Wendy’s system as the brand’s momentum is compelling and the “Cut Above” positioning is truly resonating with consumers.”

NPC International, Inc. is the world’s largest Pizza Hut franchisee and currently operates 1,261 Pizza Hut restaurants and delivery units in 28 states and 90 Wendy’s units in 3 states.