Wendy’s agrees to sell Arby’s to private group

Roark Capital Group is on a buying spree. On Monday, the Atlanta investment firm announced that it had acquired Corner Bakery’s parent company, Il Fornaio America Corp., and would buy 80% of Arby’s in a deal valued at $430 million.

Details of the Corner Bakery acquisition were not disclosed.

The news reflects a juiced-up mergers-and-acquisitions market and increased interest in the restaurant business. Last month, Golden Gate Capital snapped up California Pizza Kitchen for $470 million. And last year, Burger King sold itself for $3.26 billion to investment firm 3G Capital.

In a research report, R.W. Baird analyst David Tarantino described the Arby’s news as “yet another example that underscores the healthy appetite among private equity firms for deals in the restaurant space.”

Darren Tristano, executive vice president of Technomic, a Chicago-based restaurant consulting firm, said private equity interest in restaurants seems to be increasing.

“There’s a point where if you’re struggling and you face some head winds, sometimes it’s easier to be acquired than declare bankruptcy or continue to struggle,” he said.

Corner Bakery, which was founded in Chicago in 1991 and later moved to Dallas, has about 119 locations in the U.S. It began franchising in 2007. The chain features fresh-baked breads and sandwiches. Il Fornaio, an upscale Italian chain based in Corte Madera, Calif., with 22 restaurants, bought Corner Bakery from Brinker International in 2006.

Tristano said Corner Bakery was positioned in two hot areas of the restaurant industry, bakery and fast-casual dining, but its biggest challenge has been bakery chain Panera. St. Louis-based Panera is now more than 10 times the size of Corner Bakery, with 1,500 locations in the U.S.

“The partnership with Roark is a perfect fit, providing each brand with unique opportunities,” Mike Hislop, chief executive of Il Fornaio America, said in a statement. “Our ability to leverage Roark’s strong background and extensive resources within the franchise and restaurant industries allows us to better serve our current Corner Bakery Cafe partners, while accelerating our pursuit of new franchisees.”

Roark Managing Partner Neal Aronson added that Hislop and his teams “have built two terrific brands with strong points of differentiation and excellent consumer appeal.”

The Arby’s deal is expected to close in the third quarter.

Known for its roast beef sandwiches and curly fries, Arby’s was acquired by Triarc Cos. in 2005 in a deal valued at $800 million. The 3,600-unit chain merged with Wendy’s when Triarc bought the hamburger chain in 2008. As part of Monday’s deal, Roark has agreed to pay $130 million in cash and assume $190 million in debt. Wendy’s/Arby’s Group Inc. would keep a 19% interest, valued at $30 million.

In a statement Monday, Wendy’s/Arby’s CEO Roland Smith said the divestiture would allow the company to focus on its burger business. Both chains have lagged in same-store sales.

eyork@tribune.com