Private equity firm Thomas H. Lee Partners has entered into a definitive merger agreement to acquire CKE Restaurants, owner of Carl’s Jr. and Hardee’s quick-service restaurant chains, for approximately USD928m, including the assumption of approximately USD309m of net debt.
Under the terms of the agreement, CKE stockholders will receive USD11.05 in cash for each share of CKE common stock they hold, representing a 24 per cent premium to the company’s closing share price on 25 February 2010 and a 29 per cent premium to the company’s volume weighted average closing share price of approximately USD8.60 during the 30 trading days ended 25 February 2010.
Andrew F. Puzder, chief executive officer of CKE Restaurants, says: “We believe this transaction provides excellent value to our shareholders and represents an exciting opportunity to continue the growth and development of CKE Restaurants in partnership with THL. THL’s proven history of success as an investor and value-added partner to its portfolio companies, coupled with its deep financial expertise and experience in the consumer sector, will also benefit all of our stakeholders, including our franchisees and our employees.”
Todd Abbrecht, managing director of THL Partners, says: “THL is pleased to partner with CKE’s seasoned management team to continue building on the company’s powerful brands and strong position in the marketplace. We are committed to making this great company even better, and to working together with the entire organisation to provide an even stronger foundation for value creation, expansion and profitable growth.”
Under the merger agreement, CKE Restaurants will actively solicit superior proposals from third parties for a period of 40 days continuing through 6 April 2010. CKE Restaurants does not intend to disclose developments with respect to this solicitation process unless and until its board of directors has made a decision regarding any superior proposals that may be made.
The transaction is expected to close in the second quarter of 2010, subject to approval by CKE shareholders, regulatory approval, and other customary closing conditions.
