Triarc Companies, Inc. (NYSE: TRY) announced today the United States Bankruptcy Court for the Southern District of New York has confirmed Triarc's plan of reorganization pursuant to which Triarc will acquire Sybra, Inc., the second largest franchisee of the Arby's® brand. The acquisition is expected to close in the fourth quarter of 2002.
Sybra, Inc., a subsidiary of I.C.H. Corporation, and currently in Chapter 11, owns and operates 239 Arby's restaurants in nine states located primarily in Michigan, Texas, Pennsylvania, New Jersey and Florida.
In return for 100% of the equity of a reorganized Sybra, Triarc will pay $8 million to ICH's creditors. In addition, Triarc will make a $14.5 million investment in Sybra and Sybra will remain exclusively liable for its long-term debt and capital lease obligations, which aggregated approximately $104 million as of December 31, 2001. Triarc will also make available to, or obtain for, Sybra a $5.0 million standby financing facility for each of three years (up to $15.0 million in the aggregate) to fund any operating shortfalls of Sybra.
Commenting on the planned acquisition, Nelson Peltz, Triarc's Chairman and Chief Executive Officer, said: "The Sybra acquisition represents a unique opportunity to own a group of highly profitable Arby's restaurants with a bright future. Sybra also has an excellent operating management team."
Peltz added: "We believe that the acquisition of Sybra solidifies Triarc's commitment to the Arby's brand and the Arby's system. We envision the Sybra acquisition as presenting opportunities to strengthen the Arby's brand. We also believe that ownership of these restaurants will increase the value of the Arby's brand and thus enhance Triarc shareholder value."
In February 2002, ICH and its principal subsidiaries, including Sybra, each voluntarily filed petitions for reorganization under chapter 11 of the Bankruptcy Code. Sybra has stated that the purpose of the filings was to separate Sybra's Arby's operations from certain ongoing ICH liabilities related to ICH's former ownership of the California-based Lyon's restaurant chain. To date, the filings appear to have helped preserve Sybra's Arby's operations, allowing essentially all of Sybra's restaurants to continue to operate without disruption.
Triarc is a holding company and, through its subsidiaries, is the franchisor of Arby's® restaurants.