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    Triarc Closes Deal, Merges With RTM

  • Industry News July 27, 2005

    Triarc Companies, Inc. announced yesterday that it has completed its acquisition of RTM Restaurant Group (RTM). Triarc, through its subsidiaries, is the franchisor of the Arby's(R) restaurant system, which consists of approximately 3,500 restaurants, and is the owner and operator of 233 Arby's restaurants. RTM is Arby's largest franchisee, with 775 Arby's restaurants in 22 states.

    Total consideration consisted of $175 million in cash, subject to post closing adjustment, plus approximately 9.7 million shares of Triarc's Class B Common Stock. In connection with the RTM acquisition, Arby's Restaurant Group, Inc. (ARG), a wholly owned subsidiary of Triarc, also assumed approximately $400 million of RTM net debt, including approximately $184 million of RTM capitalized lease and financing obligations.

    Triarc provided $135 million in cash to fund the acquisition. ARG funded the remaining cash needed to complete the acquisition, including transaction costs, and is refinancing substantially all of its and RTM's existing indebtedness, with the proceeds from a new $720 million credit facility. This refinancing will include the repayment of approximately $234 million of RTM third-party debt and approximately $71 million of ARG third-party debt as well as the defeasance of the Arby's Franchise Trust.

    Doug Benham, president and CEO of Arby's, will lead ARG as its president and chief executive officer. Prior to joining Arby's, Benham was the CFO of RTM. Thomas Garrett, currently president of RTM, will become ARG's COO. Todd Weyhrich (currently Arby's chief financial officer), Sharron Barton (currently RTM's chief administrative officer), and Jordan Krolick (currently Arby's chief development officer) will serve in similar capacities for the combined company. It is also expected that Russell Umphenour, Jr., RTM's CEO, will join the Triarc Board of Directors.

    The ARG management team, which will consist of management from both Arby's and RTM, has an average of 15 years of quick-service restaurant experience and an average of 14 years with Arby's. The combined company, the franchisor of the Arby's restaurant system and the owner and operator of over 1,000 Arby's restaurants located in the United States, will be headquartered in Atlanta, Georgia.

    Commenting on the RTM acquisition, Triarc’s Peltz says, "As a result of the transaction, the combined company should be positioned to implement multiple growth initiatives, to benefit from scale efficiencies and, working with franchisees, to refine operational practices across the franchise system.” He adds, “The credit facility gives Arby's both flexibility and liquidity to fund future growth."

    RTM’s Umphenour says, "The acquisition of RTM by Arby's is a natural and logical next step in Arby's 40-year brand history."

    "Arby's acquisition of RTM will create a large, fully integrated and growing restaurant company,” Benham says. “As a result of the RTM acquisition, we see many future opportunities to continue to improve and accelerate unit development. We also believe we should be well positioned to improve our brand equity and that system-wide profitability should continue to increase. "

    Triarc is a holding company and, through its subsidiaries, the franchisor of the Arby's restaurant system and, following the acquisition of RTM Restaurant Group, the owner and operator of over 1,000 Arby's restaurants located in the United States. Triarc also owns an approximate 64 percent capital interest in Deerfield & Company LLC, a Chicago-based asset manager offering a diverse range of fixed income and credit-related strategies to institutional investors with $8.8 billion under management as of May 1, 2005.

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