Just damn.
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Posted on 11/02/2004 6:39:54 AM PST by mhking
After 12 years of sharing the coop with its bigger sibling, Church's Chicken will be winging it alone.
Atlanta-based AFC Enterprises, parent to the Popeyes Chicken & Biscuits and Church's fast food chains, is selling the Church's brand to a private equity firm for $390 million.
The deal with Atlanta-based Crescent Capital Investments Inc. involves 283 company-operated restaurants and 953 franchised outlets in 29 states. It also includes 300 franchised restaurants in Puerto Rico and 15 countries.
AFC shares gained 37 cents on the news to close at $22.05 Monday.
Crescent Capital, whose parent is the Bahrain-based First Islamic Investment Bank, also has a stake in the Caribou Coffee Co. coffeehouse chain.
The sale, expected to be complete by year's end, is part of AFC's long-term strategy of selling off its smaller brands to focus on Popeyes, its largest.
AFC expects net proceeds from the sale of Church's, after tax considerations, to be about $275 million. Further terms of the agreement were not disclosed.
AFC, the franchiser and operator of 4,109 restaurants worldwide, has been trying to sell its Church's brand for months. In September, the company signed a deal to sell Cinnabon to the Atlanta-based owner of ice cream chain Carvel for $30.3 million. That deal also is expected to close by the end of the year.
Last year, the company sold its Seattle's Best Coffee chain to Starbucks Corp. for $72 million.
Popeyes — which generates 70 percent of AFC's revenue — is the focus because AFC executives consider it to be the chain with the highest growth potential, although sales at Church's and Cinnabon have outpaced Popeyes recently. During 2003, Church's generated about $900 million in sales.
Frank J. Belatti, AFC's chairman and chief executive officer, said he believes the Popeyes brand, which has about 1,800 restaurants domestically and abroad, has plenty of room for growth.
By paring down to Popeyes, AFC is better positioned to grow the company by adding new locations and expanding the menu to add healthier items, he said.
"We feel the full valuation of Popeyes is yet to come," Belatti said. "Popeyes has, we think, a better growth story down the road. It has higher average volumes, a more contemporary menu and a broader menu."
John Beisler, an analyst who tracks the fast food industry for Whitaker Securities in New York, said focusing on the Popeyes brand is wise.
"Popeyes was the better concept," Beisler said. "Popeyes has a theme in place with their New Orleans Cajun style menu and décor and can compete head-on with KFC."
AFC also is trying to pay down debt. The company has struggled since being forced to revise financial statements from 2000, 2001 and most of 2003 because of accounting errors.
AFC was delisted from the Nasdaq stock market for several months because it missed U.S. Securities and Exchange Commission deadlines to submit the revised reports. The company was relisted in August.
Belatti said proceeds from the Church's sale, along with the the sale of Cinnabon, will be used to pay down AFC's outstanding debt, currently at about $100 million. The company is deciding if it will buy back some its stock or give shareholders a one-time special dividend, he said.
Just damn.
If you want on the list, FReepmail me. This IS a high-volume PING list...
I am confused, not something that is hard to do to me, but does this mean that Popeye's will be owned by Islamic folks or just Church's or are they the same thing...
Just Damn, is right.
I think Churches is now Moose-limb, but Popeye's is okay. I always liked Popeye's better anyway but there are only a few in Detroit. There is a Churches outlet connected to just about every White Castle in town, so I don't know what the status of those franchises is.
Just Churchs.
AFC is an Atlanta-based firm that owns Popeye's, Cinnabon, Seattle's Best Coffee, and is selling off Churchs Chicken to the Islamic group.
AFC is retaining their other properties.
Correction - they spun off Seattle's Best to Starbucks in late 2003. (sorry!)
just Church's
Dang, White Castle, I haven't had one of those in many moons, I understand that those burgers are known to cure most forms of cancer and heart disease...
;>)
I love Popeye's spicy chicken...Churches is way to greasy for me. Also you can get red bean and rice at P's which is always good.
We love PopEyes.
Our joke is:
The Bad News is that there is no Popeyes in our town.
The Good News is that there is no Popeyes in our town.
This is a side note but my uncle is out here visiting from Jaxsonville and he says many good ol boy types wont buy anything heinz. A pox on all their products.
"The Good News is that there is no Popeyes in our town."
Well, I agree with the first, but not the second. All we have locally is "Colonel Plucked".
First Islamic Investment Bank owns Crescent Capital Investment, which in turn holds majority ownership in:
Caribou Coffee
Ampad (Paper Products firm) - check your yellow legal pads. Their product-lines include: AMPAD, Embassy, evidence, Globe-Weis, Gold-Fibre, Regal Mills and World Fibre.
Lee-Boy (Commercial paving equipment)
Cirrus Industries (Private light aircraft)
DVT Corporation (Industrial imaging systems)
Medifax EDI (Medical information firm)
Smart Document Solutions (Medical release information management firm)
Transportation Safety Technologies (Electrical components for trucking industry)
WaterMark Paddlesports (Kayaking and canoeing vessels and equipment)
And apparently Churchs Chicken will join that list after their transaction has been completed.
I guess I need to get over there and get my very last taste of their heavenly biscuits...
No, you aren't a bigot -- I gave up on Caribou Coffee (which was difficult for me, I loved their coffee) once I found out about First Islamic's involvement, and I'm going to have to step away from Churchs as well -- as much as I love their biscuits. This doesn't make you a bigot by any stretch. If anything, it is you exercising your perogotive NOT to shop with an entity.
As for the overall venture, First Islamic is based in Bahrain, but Crescent Capital is a wholly-owned subsidiary based here in Atlanta.
Bless your waistline... [g]
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