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Saturday, June 01, 2002

Wendy's buys Baja Fresh for $275M


Burger co. hoping to spice up profits

By Mark Williams
The Associated Press

        COLUMBUS — Wendy's International Inc. is buying the Baja Fresh Mexican Grill restaurant chain for $275 million as the nation's third-largest hamburger chain continues to venture into other types of fare to beef up earnings.

        “We have been actively pursuing concepts in the rapidly growing, fast-casual restaurant segment, and Baja Fresh is clearly the best in the Mexican category,” Jack Schuessler, Wendy's chairman and chief executive, said in announcing the deal.

        Wendy's expects the deal to be completed in June. The 169-restaurant Baja Fresh chain will become a subsidiary of Wendy's while maintaining its offices in Thousand Oaks, Calif. Mr. Schuessler said Baja Fresh can grow to as many as 700 restaurants in five years.

        Like burger leader McDonald's Corp. — which has acquired Donatos Pizza, Chipotle Mexican Grill and Boston Market in recent years — Wendy's has been moving into other types of restaurant fare. Wendy's:

        • Bought the Canadian-based Tim Hortons coffee-and-doughnut chain in 1995.

        • Said in February that it would invest up to $10 million for a 45 percent stake in Cafe Express, a Houston-based restaurant that offers upscale meals in a fast-food format.

        • Announced a joint venture last year with the parent of food service company Cuisine de France to make a larger variety of baked goods for Tim Hortons.

        Privately-held Baja Fresh had operating income of $6.5 million on revenue of $78 million last year. Its 76 company-owned restaurants and 93 franchised restaurants had sales of $177 million in 2001, up from $107 million a year earlier.

       



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