(Continued from page 1)

Roark’s restaurant investments include a diverse range of brands, from the casual-dining Miller’s Ale House to international snack concept Cinnabon. Puzder noted that the deal offers much in the way of potential synergies.

“Roark ... has great expertise, and we’re going to take as much advantage of that as we possibly can,” he said.

In courting CKE, Roark officials were very supportive of the quick-service company’s business plan -- in particular the wide runway for international growth, as well as plans to expand the brands domestically in the Midwest and in Texas, he added.

Roark is set to purchase CKE at a time of growing momentum for the franchisor's two chains, said Kevin Burke, managing director of Trinity Capital LLC in Los Angeles, which was not involved in the deal. Both Carl's Jr. and Hardee's have reported 12 consecutive quarters of same-store sales increases.

“It’s a good match,” Burke said. “Roark has really demonstrated that they understand the consumer psychology as it relates to restaurants.”

Burke said fomer owner Apollo was smart to turn to a private sale after attempting to take CKE public again last year, a move that was shelved in light of what the company called “market conditions.”

This year, restaurant brands are showing valuations in the double digits, Burke said, while the IPO market has been mixed.

Unlike most other private-equity firms, Roark is structured financially in a way that does not impose exit strategy deadlines that often force investors to sell a brand at a less-than-optimal time, he added.

So far, Roark hasn’t exited any of its restaurant investments, which it began accumulating in 2001, when it acquired Carvel Corp. for $30 million.

John Gordon, principal of Pacific Management Consulting Group in San Diego, which was not involved in the deal, said Roark likely sees CKE as a growth opportunity, and the private-equity firm has the capital, infrastructure and experience to devote to development.

“Because Apollo loaded the balance sheet with debt, I think Roark feels the upside is growth,” he said. “And Roark has the ability to devote perhaps a longer time period to Carl’s Jr.’s international growth than Apollo did.”

Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout