NEW YORK, New York—May 31, 2002—Wendy’s International, Inc. (NYSE: WEN) announced today that it has signed a definitive agreement to acquire Fresh Enterprises, Inc., the owner and operator of the Baja Fresh Mexican Grill restaurant chain. The purchase price will be $275 million in cash for 100% of the stock of Fresh Enterprises. The Company expects the transaction to be financed with a combination of cash and the issuance of new debt.
Baja Fresh, founded in 1990, owns, operates and franchises 169 fast- casual restaurants in 16 states and the District of Columbia.
Upon completion of the transaction, which is expected in June 2002, Baja Fresh will become a wholly owned subsidiary of Wendy’s, and maintain its offices in Thousand Oaks, CA. The transaction has been approved by both companies’ board of directors, and is contingent upon customary closing conditions, including regulatory approvals.
“Baja Fresh is an excellent addition to our company and a great fit for our long-term growth strategy,” said Wendy’s Chairman and Chief Executive Officer Jack Schuessler. “We have been actively pursuing concepts in the rapidly growing, fast-casual restaurant segment and Baja Fresh is clearly the best in the Mexican category. It is a well-managed company with a focus on restaurant operations, food quality and growth.”
In 2001, net revenues for Baja Fresh totaled $78 million. Since 1998, those numbers have grown at an annual average rate of 61 percent. Average unit volumes at the fast-casual chain are $1.5 million; the average check is $7.
“We are convinced that Baja Fresh can become a strong national chain and expand its leadership in the Mexican food category,” said Schuessler. “It has all of the elements that we identified in our long-term strategic growth plans. Most importantly, it has a clear quality position just like Wendy’s. ”
“For Wendy’s International, the strategic importance of this transaction is that we expect to expand Baja Fresh over the next five years to a total range of 600 to 700 locations. We expect Baja Fresh to provide increasing revenue and income for our Company, and to provide excellent long-term return on investment,” Schuessler said.
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“With almost 12 years of operating history and more than seven years of positive systemwide comparable restaurant sales growth, Baja Fresh is a strong brand with high levels of customer satisfaction and expanding geographic appeal,” said Greg Dollarhyde.president and CEO of Fresh Enterprises. “Our vision is to become the leading national restaurant brand known as the defining standard for the highest quality and convenience in fresh Mexican food,” said Dollarhyde. “I believe Wendy’s will be a great partner who will share this vision and our values.”