GRAND RAPIDS — Restaurant operator Meritage Hospitality Group Inc. has added to its growing portfolio of Wendy’s restaurants with the acquisition of five Texas locations.
The deal for the stores in the cities of Odessa and Midland in Texas fit with the company’s five-year growth strategy and expands its portfolio to 400 Wendy’s locations, according to a statement.
Meritage (OTCQX: MHGU) expects the acquired restaurants will add about $9.1 million in annual sales and for the deal to be accretive to earnings.
“We intend to immediately integrate each of the acquired restaurants into our operating and accounting platforms and fold them into our Wendy’s remodeling program that is designed to modernize the restaurants and enhance the overall guest experience,” CEO Robert Schermer, Jr. said in a statement.
Terms of the deal were not disclosed.
The acquisition follows an August deal that added 10 Wendy’s restaurants in Georgia and Texas, as MiBiz previously reported. As well, Meritage earlier this year detailed plans to invest $100 million to develop 40 new Wendy’s restaurants in the next five years, while receiving “significant economic incentives,” including royalty and marketing fee relief, from the Wendy’s organization.
Meritage is forecasting net earnings growth of 10-20 percent this year, with EBITDA growth in the 15- to 25-percent range. The company also expects “strong sales and earnings growth in 2020, driven by newly developed, reimaged and acquired Wendy’s restaurants coming on-line during the year.”
“Wendy’s acquisitions, renovations and new restaurant development are all important components of our business model, as we expand and build,” Schermer stated.