NPC International Inc., the largest franchise operator of Pizza Hut restaurants, will make its fourth expansion into Wendy’s holdings in a year with an agreement to buy 56 units in North Carolina and Virginia.
Overland Park, Kan.-based NPC began acquiring Wendy’s units last July and said Friday it had agreed to buy 56 more restaurants in a $58.2 million deal with Memphis, Tenn.-based Carlisle Corp.
NPC said the deal should be completed in mid- to late July. Most of the Wendy’s units being purchased are concentrated in North Carolina’s Greensboro and Winston-Salem markets. NPC is owned by private equity firm Olympus Partners, and currently has 1,261 Pizza Hut locations in 28 states and 90 Wendy’s units in three states.
Jim Schwartz, NPC’s chairman and chief executive, said in a statement that NPC was “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.”
Schwartz added, “our Wendy’s holdings, including this acquisition, will total 146 restaurants, with revenues approaching 15 percent of our total consolidated revenues.”
The units in the Carlisle deal generated about $77 million in net product sales in the year ended Dec. 29, the company said.
NPC International Inc.’s parent, NPC Restaurant Holdings LLC, reported fiscal 2013 revenue of $1.09 billion, including $25.4 million in partial-year sales from 91 Wendy's locations acquired during the fiscal year ended in December 2013, according to NRN Top 200 research. NPC ended fiscal 2013 with 1,263 franchised Pizza Hut locations, in addition to the 91 Wendy's units.
Also according to NRN Top 200 research, which will be published in full June 30, Carlisle Corp. booked sales of $187 million for the fiscal year ended in December 2013, up about 10.7 percent from $169 million in sales in the preceding year. Carlisle ended fiscal 2013 with 134 franchised Wendy's restaurants.
NPC said it intends to fund this Wendy’s acquisition with a $40 million term loan, a draw on the company’s $110 million revolving credit line, and cash. Included in the deal are 20 fee-owned properties, and NPC said in a statement that it plans to do sale-leasebacks or other transactions on those properties after closing the deal.
The restaurants will be acquired and operated by the company’s NPC Quality Burgers Inc. subsidiary, which NPC created last July in its first acquisition of 24 Wendy’s units.
NPC said that as part of the transaction it plans to remodel some of the acquired restaurants into Wendy’s new “Image Activation” format.
Alan Liddle, Nation’s Restaurant News’ managing editor for special projects, contributed to this report.
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