Wendy's/Arby's (WEN) Sells Arby's for $430M

Wendy’s/Arby’s Group, Inc. (NYSE: WEN), has entered into a definitive agreement for the sale of Arby’s Restaurant Group, Inc. to a buyer formed by Roark Capital Group. Wendy’s/Arby’s Group will retain an 18.5 percent ownership interest in the Arby’s business.

Aggregate consideration on the deal is $430 million. 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. The buyer 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.

Wendy’s/Arby’s Group expects that Arby’s will be reported as a discontinued operation in Wendy’s/Arby’s Group’s second quarter 2011 financial results.

Closing is expected in early Q311.

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