Grand Rapids-based Meritage Hospitality Group Inc. (OTCQX: MHGU), one of the country’s largest owners and operators of Wendy’s fast food restaurants, has tapped a new line of credit to continue its expansion.
The company said in a statement it has closed on a $97 million credit facility with Bellevue, Wash.-based City National Bank.
The line of credit will save the company about $1 million per year in interest payments and is expected to help Meritage Hospitality pursue more acquisitions and complete renovations of aging locations.
“We consider ourselves in the early stages of a major Wendy’s consolidation and investment cycle driven by acquisitions, restaurant renovations and new development,” Meritage CEO Robert Schermer said in a statement. “This new (credit) facility will greatly assist us in achieving continued profitable growth.”
Additionally, the company reported its third quarter earnings last week, showing that sales increased 15.7 percent to $61.7 million over the same period last year. The company also saw gains in net earnings and earnings before interest, taxes, depreciation and amortization (EBITDA), an accounting practice used as a general gauge of profitability.
In August, Meritage Hospitality announced the acquisition of 10 Wendy’s restaurants in the Oklahoma City area.
“The major drivers of success in the third quarter were double-digit sales gains associated with (renovated) Wendy’s restaurants and the successful integration of acquired restaurants and newly-built restaurants,” Schermer said in a statement. “We remain focused on continued profitable growth and scalability within the Wendy’s franchise system.”