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Fiesta Restaurant Group Inc (NASDAQ: FRGI) has entered into a definitive stock purchase agreement to sell the Taco Cabana restaurant brand to YTC Enterprises LLC, an affiliate of Yadav Enterprises Inc.
The agreement provides for the sale of all of the outstanding capital stock of Taco Cabana Inc, the parent company of the Taco Cabana business, for a cash purchase price of $85 million.
The transaction is expected to close in the third quarter of 2021.
Fiesta will use the sale proceeds to repay about $74.6 million of outstanding term loan borrowings.
A portion of sale proceeds will be used for investments to accelerate Pollo Tropical’s (restaurant chain) growth.
Fiesta’s cash and equivalents totaled $67.6 million as of June 27, 2021.
Price action: FRGI shares closed higher by 11.24% at $14.94 on Thursday.
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