Santa Barbara Restaurant Group Inc., whose holdings include the Green Burrito Mexican fast-food chain, said late Tuesday that it has agreed to acquire the parent of the La Salsa Fresh Mexican Food restaurants.
Santa Barbara will acquire La Salsa Holding Co. for an undisclosed amount of stock, said Andrew F. Puzder, Santa Barbara Restaurant's chief executive. La Salsa is a privately held company based in Santa Monica that owns 50 La Salsa eateries and has franchised 48 others.
Santa Barbara Restaurant is headed by Chairman William P. Foley II, who also is chairman of Carl's Jr. parent CKE Restaurants Inc. in Anaheim. Santa Barbara Restaurant operates 93 eateries under the Green Burrito, JB's, Galaxy Diner and Timber Lodge Steakhouse names, and has franchised another 227 restaurants. The company earned $1.4 million in 1998 on sales of $35.5 million.
Puzder said Tuesday evening that there are no plans to combine La Salsa's operations with those of Green Burrito.
"There's a separate brand there; they are very differently prepared foods," Puzder said. La Salsa "is a very good concept to grow, because our going-in costs our low. We think we can grow it economically and fairly rapidly."
In a statement, La Salsa Chairman Charlie Lynch said the sale will allow his company to "fulfill its mission and growth [objectives] and remain a leader in its category."
La Salsa opened its first restaurant at Pico and Sepulveda boulevards in West Los Angeles in 1978 by entrepreneurs Vicky Tanner and Howdy Kabrins, who remain on its board of directors. Two venture capital firms, Sienna Holdings and Menlo Park-based InterWest Partners bought a majority stake in 1992.
Today, La Salsa has about 500 employees and annual sales of about $25 million.
For Santa Barbara Restaurant Group, the acquisition is its second in as many years. Last year, the company purchased 21 Timber Lodge Steakhouse restaurants in the Midwest.
The deal, which was announced after the close of stock markets Tuesday, is to be completed this fall. Santa Barbara Restaurant shares fell 13 cents, closing at $2.44 on Nasdaq.