The total transaction value is approximately $188 million, including the assumption of Checkers' debt. The acquisition agreement has been approved by the Checkers Board of Directors and by the Special Committee of the Board formed to explore strategic alternatives, and is expected to close in the second quarter of 2006. Completion of the transaction is subject to customary conditions and regulatory approvals and the approval of holders of a majority of Checkers' outstanding shares. Wellspring has furnished Checkers with commitment letters for the equity and debt financing necessary for the transaction.
"Nine months ago the Board of Directors publicly announced a process seeking strategic and financial alternatives to enhance shareholder value and established a Special Committee to that end," said Peter O'Hara, Chairman of the Board of Checkers. "After an exhaustive process, the Special Committee and the Board determined that this transaction offered shareholders the best opportunity to maximize value from the pre-announcement stock price. We are confident that the Company will benefit from Wellspring's innovative operational strategies and financing expertise."
Carl Stanton, Partner of Wellspring, said: "Checkers has a unique double drive-thru concept with great food, and a fun, fast-paced brand image, focused on serving consumers on-the-go. We look forward to working with the Company's current management, who we hope will join us as equity owners of the Company, to continue the expansion of the Checkers and Rally's concepts."
Citigroup Corporate and Investment Banking acted as exclusive financial advisor to the Special Committee in connection with the acquisition transaction. Morgan Keegan is acting as a financial advisor to Wellspring Capital. Guggenheim Corporate Funding, LLC will provide the debt financing to support Taxi Holdings' acquisition. Thelen Reid & Priest LLP is acting as legal advisor to the Special Committee. Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal advisor to Taxi Holdings and Wellspring.
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