Checkers Drive-In
Restaurants, Inc. announced today that it has entered into a
definitive agreement with Taxi Holdings Corp., an affiliate of Wellspring
Capital Management LLC, a private equity firm, whereby Taxi Holdings will
acquire all of Checkers’ outstanding shares for $15.00 per share in cash.

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

“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.

News, Checkers