The parent company of hamburger chain Carl's Jr. announced it will acquire the struggling Hardee's restaurant business, making it one of the nation's largest fast-food companies.
The $327 million deal greatly expands the operations of CKE Restaurants Inc. beyond its Southern California base and give the chain an instant presence east of the Mississippi River.
The agreement ends months of speculation that CKE would buy Rocky Mount, N.C.-based Hardee's which has 3,100 outlets and strong positions in the Midwest and Southeast.
Carl's Jr. is a 675-store chain that operates mostly in California and six other western states.
"This is a strong marriage of two well-known brands with a combined 90 years experience in the restaurant business," said CKE Chairman William P. Foley II.
"This is a great opportunity for our customers, franchises, and employees," Hardee's President H. Stephen McManus. "We look forward to working with the CKE team, which has a strong track record in our business. These two brands are an excellent fit, in geography as well as menu."
CKE plans to spice up Hardee's selection by replacing its lunch and dinner menu with charbroiled sandwiches. Hardee's popular breakfast menu, however, will be retained.
Since taking control of Anaheim, Calif.-based CKE following a bitter boardroom battle with founder Carl N. Karcher in 1993, Foley has waged an aggressive acquisition program to extend the company's reach.
Last year, CKE's earnings more than doubled to a record $22.3 million, while revenue climbed more than 36 percent to nearly $537 million. Its stock also enjoyed success, climbing 80 percent that year.
Hardee's is the fourth-largest burger chain in the nation, with outlets in 41 states and 10 foreign countries. McDonald's is first, followed by Burger King and Wendy's.
But the chain has struggled. Hardee's parent, Montreal-based Imasco Ltd., recently reported that the chain had an operating loss of 11 million Canadian dollars during the first quarter.
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