NPC has entered into an agreement with a subsidiary of The Wendy’s Company to acquire 35 Wendy’s restaurants for $29.2 million, plus amounts for working capital. NPC also agreed to acquire four restaurants recently constructed by Wendy’s for a cost of $7.4 million, thereby increasing the number of restaurants to be acquired to 39. As part of the transaction, NPC plans to remodel certain acquired and existing restaurants in Wendy’s new Image Activation format.
The acquisition is part of The Wendy’s Company’s System Optimization initiative intended to reduce company-operated restaurant ownership to approximately five percent of the total system. This acquisition will be funded primarily with available cash on hand. The restaurants will be owned and operated by NPC’s wholly-owned subsidiary, NPC Quality Burgers, Inc., which also entered into the asset purchase agreement to acquire the restaurants.
The units to be acquired are located in the Raleigh-Durham metropolitan area. According to information provided to NPC, 35 of the units to be acquired by NPC generated approximately $59 million in net product sales during the 52 weeks ended January 3, 2016. NPC expects the closing to occur in late July 2016, subject to customary closing conditions.
Jim Schwartz, Chairman and CEO of NPC International, Inc., said, “We are excited to participate in Wendy’s system optimization initiative and further our growth in the Wendy’s system. This highly coveted market will leverage our existing Wendy’s infrastructure and is contiguous with our current Winston-Salem and Greensboro Wendy’s operations. This acquisition will be our fifth acquisition in the Wendy’s system since 2013 and will increase our holdings to 183 restaurants with revenues exceeding $260 million, or approximately 22% of our total consolidated revenues.”
NPC International, Inc. is the world’s largest Pizza Hut franchisee and currently operates 1,233 Pizza Hut restaurants and delivery units in 28 states and 144 Wendy’s units in 5 states.