Food Business News - June 21, 2011 - (Page 16)

Roark Capital ups presence in food industry Arby’s, Corner Bakery Cafe and Il Fornaio set to join portfolio ATLANTA — Roark Capital Group, an R k C i l G Atlanta-based private equity firm, is stepping up its presence in the food industry with the announcement last week of several key acquisitions. First, Roark said it has agreed to acquire an 81.5% stake in Arby’s Restaurant Group, Inc. from Wendy’s/Arby’s Group, Inc. in a transaction valued at $430 million. Under terms of the transaction, Wendy’s/Arby’s Group will retain an 18.5% ownership interest in the Arby’s business. Atlantabased Arby’s is the second largest quickservice sandwich chain in the United States with more than 3,600 restaurants systemwide. The terms of the agreement provide for Wendy’s/Arby’s Group to receive at closing approximately $130 million of cash, subject to customary adjustments, and retain an 18.5% common stock interest in the Arby’s business expected to be valued at approximately $30 million. Roark will assume approximately $190 million of Arby’s-related debt, consisting primarily of capital lease and sale-leaseback obligations. The terms of the transaction will trigger an income tax benefit to Wendy’s/Arby’s Group valued at an estimated $80 million, which Wendy’s/Arby’s Group currently expects to realize over the next few years. “This transaction provides substantial value to our stockholders, as it is expected to be accretive to earnings, deleverage the balance sheet and allow us to devote our full attention and resources on the exciting growth opportunities we have at Wendy’s,” said Roland Smith, president and chief executive officer of Wendy’s/ Arby’s Group. “These opportunities include revitalization of our core menu, expanding breakfast, modernizing our facilities, building new restaurants in the United S h U i d States and pursuing global d i l b l expansion. “As we move through this transition year, we are laying the groundwork for Wendy’s to deliver 10% to 15% average annual EBITDA growth in 2012 and beyond. We view Wendy’s as one of the most attractive growth stories in the quick-service restaurant industry.” Neal Aronson, managing partner of Roark Capital Group, said, “This is an exciting day for Roark as well as Arby’s. Arby’s has more than 47 years of offering unique, high quality and better-tasting alternatives to traditional fast food. We look forward to working with Arby’s president Hala Moddelmog and the dedicated employees and franchisees to help this great brand achieve its full potential.” The transaction is expected to close early in the third quarter. In a separate announcement, Roark Capital Group said it has acquired Fornaio (America) Corp., owner of Corner Bakery Cafe and Il Fornaio Restaurants and Bakeries. Fi i l di l d Financial terms were not disclosed. Founded in 1991 as a small bread bakery in Chicago, Corner Bakery Cafe now is based in Dallas and operates 119 locations nationwide. Corner Bakery launched a strategic franchise development program in 2007 to attract seasoned franchise partners with multi-unit restaurant and retail experience. Founded in Italy and based in Corte Madera, Calif., Il Fornaio owns and operates 22 full-service Italian restaurants in California and across the United States that serve Italian cuisine based on authentic regional Italian recipes. Il Fornaio’s wholesale bakeries produce a wide variety of hand-made bread, pastries and other artisan baked goods for sale at their own locations and to grocers and food service customers across the United States. “The partnership with Roark is a perfect fit, providing each brand with unique opportunities,” said Mike Hislop, chief executive officer of Il Fornaio (America) Corp. “Our ability to leverage Roark’s strong background and extensive resources within the franchise and restaurant industries allows us to better serve our current Corner Bakery Cafe partners, while accelerating our pursuit of new franchisees.” With the acquisitions of Arby’s, Corner Bakery Cafe and Il Fornaio, Roark now has invested in 21 franchise businesses that operate in 50 states and 43 countries. Roark’s other restaurant investments include FOCUS Brands, parent company of Carvel Ice Cream, Cinnabon, Schlotzsky’s, Moe’s Southwest Grill, Auntie Anne’s Pretzel’s and the franchisor of Seattle’s Best Coffee on certain military bases and in certain international markets, as well as McAlister’s Deli, and Wingstop. FBN 16 FOODBUSINESS NEWS ® June 21, 2011

Table of Contents for the Digital Edition of Food Business News - June 21, 2011

Food Business News - June 21, 2011
C.D.C. report fi nds increase in salmonella infections
General Mills sees ‘robust’ growth opportunities in global yogurt category
Following Jimmy
Web Contents
Editorial - German E.coli outbreak underscores need to fund F.S.M.A.
ConAgra acquires Marie Callender’s trademarks
Kraft investing to eradicate malnutrition
Perkins & Marie Callender’s fi les for bankruptcy
Snack food sales reach $64 billion in 2010, may top $77 billion by 2015
Recession seen triggering sharp drop in food product introductions
Cargill opens Latin American innovation center
John Bilbrey to helm at Hershey
ICL Performance to acquire Cosmocel Quimica
Sugar bull
Smithfield terminates Campofrio bid
Omega-3 food, beverage market grows 11%
Roark Capital ups presence in food industry
Calavo earnings decline due to higher costs
Mountaire Farms acquiring bankrupt poultry company
Diamond Foods returns to profi tability in third quarter
Nestle water efforts recognized
C.D.C. report points to increase in salmonella infections
Consumers await full impact of higher food prices
A difficult disappearing act
Innovation honored by the I.F.T.
Mintel: Functional foods ‘on life support’
Allergen labeling guidance needed
Creating a defi nition of sustainable nutrition
German E. coli outbreak may lead to changes
Chronic inflammation: The next opportunity?
ConAgra Mills unveils food safety system for flour
Finding fiber everywhere
Spicy fl avors moving beyond heat
Dairy Business News
Commission clears Lactalis acquisition of Parmalat
New texture system replaces milk fat in dairy products
Researchers target sodium redution in cheese
General Mills sees ‘robust’ growth opportunities in global yogurt category
Saputo fiscal year earnings rise 18%
New Danisco system targets artisan ice cream
Researchers target sodium reduction in cheese
Single-serve licensing
Quiznos adds three concepts to menu
Flax USA introduces Flaxmilk
Johnsonville Sausage adds chicken varieties
General Mills adds brownies to Fiber One line
Farley’s & Sathers updates Tree Top line
Ingredient Market Trends
Senate vote to end ethanol support seen as symbolic
Ingredient Markets
New container may hold two compatible products
Solbar names president of U.S. business
Sensient launches naturally-sourced colors in dry state
Comax develops fl avors for energy drinks
Puratos launches bake-stable chocolate fi llings
DSM completes U.S. innovation center
Sea salt assists in sodium reduction
Ad Index
Food Business in the News

Food Business News - June 21, 2011