GRAND RAPIDS, Mich., Feb. 22, 2016 (GLOBE NEWSWIRE) -- Meritage Hospitality Group Inc. (OTCQX:MHGU), one of the nation’s premier restaurant operators, today announced it has entered into a definitive asset purchase agreement to acquire a portfolio of 19 casual and polished-casual dining restaurants located in the Midwest and Mid-Atlantic states.
The transaction is subject to customary due diligence including debt and equity financing arrangements. The closing is anticipated to occur in summer 2016.
Chief Executive Officer Robert Schermer, Jr., stated, “We are very excited about the opportunity to expand our growing and profitable casual dining segment with a unique portfolio of high quality brands which have a long operating history and strong operating culture. This transaction will represent our fifteenth acquisition in the past five years and is consistent with our past financial underwriting criteria. Post-closing we intend to integrate the restaurants into our unique internet-based operating & accounting systems platform.”
Company 2016 Outlook: Continued Sales & Earnings Growth
The Company’s 2016 operating targets will be updated near the end of the second quarter to reflect the acquisition, which we anticipate will be accretive to sales and earnings growth.
The Company is planning to accelerate restaurant capital investments in 2016 including new casual dining restaurants and the renovation of 18 existing Wendy’s locations utilizing the new image activation design standards.
Meritage Hospitality Group is one of the nation’s premier restaurant operators, with 164 restaurants in operation located in Florida, Georgia, Michigan, North Carolina, South Carolina, Ohio and Virginia. Meritage is headquartered in Grand Rapids, Michigan, operating with a workforce of approximately 5,100 employees. The Company has approximately 5.6 million (basic) common shares outstanding. The Company’s public filings can be viewed at www.otcqx.com, under the stock symbol MHGU, or the Company’s website www.meritagehospitality.com.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release that are not historical facts constitute forward-looking statements. These may be identified by words such as “estimates,” “anticipates,” “hopes,” “projects,” “plans,” “expects,” “believes,” “should,” and similar expressions, and by the context in which they are used. Such statements are based only upon current expectations of the Company. Any forward-looking statement speaks only as of the date made. Reliance should not be placed on forward-looking statements because they involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to differ materially from those expressed or implied. Meritage undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which they are made.
Statements concerning expected financial performance, business strategies and action which Meritage intends to pursue to achieve its strategic objectives, constitute forward-looking information. Implementation of these strategies and achievement of such financial performance are subject to numerous conditions, uncertainties and risk factors, which could cause actual performance to differ materially from the forward-looking statements. These include, without limitation: competition; changes in the national or local economy; changes in consumer tastes and eating habits; concerns about the nutritional quality of our restaurant menu items; concerns about consumption of beef or other menu items due to diseases; promotions and price discounting by competitors; severe weather; changes in travel patterns; road construction; demographic trends; the cost of food, labor and energy; the availability and cost of suitable restaurant sites; the ability to finance expansion; interest rates; insurance costs; the availability of adequate managers and hourly-paid employees; directives issued by the franchisor regarding operations and menu pricing; the general reputation of Meritage’s and its franchisors’ restaurants; the relationship between Meritage and its franchisors; legal claims; Meritage’s ability to consummate acquisitions or, if consummated, to successfully integrate acquired businesses into Meritage’s operations, Meritage’s ability to recognize the benefits of acquisitions, including potential synergies and cost savings, failure of an acquisition or acquired company to achieve its plans and objectives generally, risk that proposed or consummated acquisitions may disrupt operations or pose difficulties in employee retention or otherwise affect financial or operating results, Meritage’s ability to raise the capital that may be required to accomplish the foregoing, and the recurring need for renovation and capital improvements. Meritage is also subject to extensive government regulations relating to, among other things, zoning, public health, sanitation, alcoholic beverage control, environment, food preparation, minimum and overtime wages and tips, employment of minors, citizenship requirements, working conditions, and the operation of its restaurants. Because Meritage’s operations are concentrated in certain areas of Michigan, Florida, Georgia, North and South Carolina and Virginia, continued economic decline in these states, or in the local economies where our restaurants are located, could adversely affect our operations. Additionally, with Meritage’s expansion into Florida, the Company could be adversely affected by tropical storms or hurricanes.
This press release is not intended to and does not constitute an offer to sell or a solicitation of an offer to buy any securities of the Company.