CKE Restaurants to Expand in Texas, Oklahoma

Continuing on its expansion path, CKE Restaurants Inc. said Wednesday that it will pay $42 million in cash for 109 Taco Bueno fast-food eateries in Texas and Oklahoma plus five other restaurants owned by Casa Bonita Inc..

CKE, the Anaheim-based parent company of Carl Karcher Enterprises Inc. and operator of about 665 Carl’s Jr. restaurants, said Taco Bueno would provide an entry into new markets and an opportunity to capitalize on the growing popularity of Mexican fast food.

CKE’s recent venture in Mexican fast food, though successful, has been limited to offering Green Burrito fare at a small number of its Carl’s Jr. locations. CKE said Taco Bueno’s main rival is Taco Bell of Irvine.

CKE’s stock rose $1.50 Wednesday to $29, an all-time high, in trading on the New York Stock Exchange.

CKE said it plans to form a new entity with one or more third-party investors to own and operate the profitable Casa Bonita restaurants, though CKE would remain majority owner. CKE said it would pay for the acquisition partly by tapping into a new $75-million credit agreement that was announced last week. The deal is expected to be completed within two months.

Casa Bonita’s revenue totaled $80 million in the fiscal year ended April 1. CKE had $465 million in sales in the year ended Jan. 29.

The agreement with Casa Bonita, which is owned by London-based Unigate PLC, comes just a month after CKE completed the purchase of Summit Family Restaurants Inc., which operates 124 JB’s Restaurants, Hometown Buffets and Galaxy Diners in western states. Earlier in the year, CKE agreed to take over 28 Rally’s Hamburgers locations in California and Arizona.