SYRACUSE, N.Y. — Carrols Restaurant Group Inc., parent Company of Carrols Corp., has announced that its long-time institutional investors, funds managed by affiliates of Madison Dearborn Partners LLC and BIB Holdings (Bermuda) Ltd., a wholly-owned subsidiary of Bahrain International Bank (E.C.), each entered into agreements to sell all of their common stock holdings in Carrols Restaurant Group Inc. to funds managed by private equity firm Jefferies Capital Partners.
Carrols Restaurant Group owns and operates Hispanic brand fast casuals Pollo Tropical and Taco Cabana and is the largest Burger King franchisee, based on number of restaurants.
The agreements provide for the sale by Madison Dearborn and BIB Holdings of a total of 6.6 million shares of Carrols Restaurant Group's common stock comprising approximately 30.4 percent of Carrols Restaurant Group's outstanding common stock. The transactions are expected to close on or about July 2, 2009.
In connection with the transaction, the company has entered into a registration rights agreement with the purchasers providing for certain demand and piggyback registration rights with respect to the common stock held by such funds or their affiliates.
BIB Holdings initially acquired a controlling interest in Carrols Restaurant Group in 1996, and Madison Dearborn initially acquired its interest in Carrols Restaurant Group from BIB Holdings in 1997. BIB Holdings and Madison Dearborn previously sold shares of Carrols Restaurant Group's common stock in Carrols Restaurant Group's initial public offering, completed in December 2006.
Board of directors changes
It is anticipated that if the transactions close, Robin P. Selati, a managing director of Madison Dearborn Partners LLC, and Olaseni Adeyemi Sonuga, the general manager of Bahrain International Bank, will both resign from the board of directors of Carrols Restaurant Group, effective upon the closing of each of the transactions, and Brian Friedman, the president of Jefferies Capital Partners and Nicholas Daraviras, a managing director of Jefferies Capital Partners will be elected to the board of directors to replace Selati and Sonuga.
Jefferies Capital Partners is a private equity investment firm focused on select industries, including the consumer and restaurant sectors. It is an affiliate of Jefferies & Company Inc., a New York based investment bank. Brian Friedman is president and founder of Jefferies Capital Partners and also serves as chairman of the executive committee of Jefferies Group Inc.
