GRAND RAPIDS — Restaurant operator Meritage Hospitality Group Inc. expanded its holdings in the Atlanta, Ga. market with the acquisition of five Wendy’s stores.
The Grand Rapids-based Meritage (OTCQX: MHGU) expects the stores to add about $8.8 million in annual sales to the company and be accretive to earnings going forward.
The deal complements Meritage’s existing portfolio of 39 Wendy’s stores in the Atlanta market, according to CEO Robert Schermer Jr. As well, the deal fits with Meritage’s growth strategy to operate 435 total restaurants — including a planned 400 Wendy’s locations — by 2025.
“We intend to immediately integrate each of the acquired Wendy’s into our operating and accounting platform and fold them into our Wendy’s remodeling program that is designed to enhance the overall guest experience” Schermer said in a statement.
Schermer was named a winner in the executive category of the 2019 MiBiz Dealmakers of the Year Awards.
For its part, Meritage says earnings before interest, tax, depreciation and amortization (EBITDA) has grown 18.7 percent during the first nine months of 2019. The company expects to end the year with sales and net earnings growth in the 10- to 20-percent range, both of which it forecasts will accelerate in 2020. Growth next year should be driven by the addition of new, acquired and redeveloped restaurants coming online and “the nationwide roll-out of breakfast across our Wendy’s markets in the first quarter of 2020,” according to the company.
Meritage operates a portfolio of 332 restaurants spanning 16 states. It employs more than 10,500 people.