ATLANTA and DUBLIN, Ohio -- Triarc Cos. Inc., the franchisor of the Arby's restaurant system, and Wendy 's International Inc. announced they have signed a definitive merger agreement, which has been approved by the boards of directors of both companies.
The transaction will bring together Arby 's and Wendy 's, two leading quick-service-restaurant brands.The combined systems will have approximately 10,000 restaurant units and pro forma annual system sales of approximately $12.5 billion, positioning it as the nation 's third-largest quick-service-restaurant company.
Arby 's and Wendy [image-nocss] 's will operate as autonomous brand business units based in Atlanta and Dublin, Ohio, respectively, each dedicated to operational improvements.
The new company expects to pursue day-part expansion, primarily focused on breakfast, global expansion for both brands, and growth through future acquisitions and new unit development. A consolidated support center to be based in Atlanta will oversee all public company responsibilities and other central service functions. As a result, substantial corporate overhead savings are expected.
Roland Smith, Triarc 's CEO, will continue in that role for the combined company and also will become CEO of the Wendy 's brand.
Triarc will change its corporate name post-merger to include the name “Wendy 's” and to reflect its new identity as the owner of this leading and well-recognized restaurant brand.
“We believe the combination of Arby 's and Wendy 's will create a powerful new restaurant company and a ‘must own ' restaurant stock with significant upside potential as we execute on the many opportunities we see to expand and improve these two very valuable brands,” said Smith in a press release. “Working together with the Wendy 's team, we expect to improve margins significantly at Wendy 's company-owned stores. We also expect to drive significant synergies and improve efficiency, resulting in substantial annual savings for our combined organization.
"Through the execution of major operating improvements and the realization of synergies, we expect to generate substantial value for shareholders. We also expect to execute on a number of growth initiatives for the combined organization that should further increase shareholder value.”
Wendy's International, Inc. is one of the world's most successful restaurant operating and franchising companies, with more than 6,600 Wendy's restaurants in the United States, Canada and international markets. Wendy 's financial advisors were J.P. Morgan Securities Inc. and Greenhill & Co. LLC. Wendy 's legal advisors were Akin Gump Strauss Hauer & Feld LLP and Winston and Strawn, and the Special Committee 's legal advisor was Baker Hostetler.
Triarc is a holding company and, through its subsidiaries, is the franchisor of the Arby's restaurant system which is comprised of approximately 3,700 restaurants, of which, as of Dec. 30, 2007, 1,106 were owned and operated by its subsidiaries. Wachovia Securities and Merrill Lynch & Co. acted as Triarc 's financial advisors, Paul, Weiss, Rifkind, Wharton & Garrison LLP and Jones Day acted as Triarc 's legal counsel, and Cadwalader, Wickersham & Taft LLC acted as Trian Fund Management, L.P. 's legal counsel.
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