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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): March 27, 1997
Carrols Corporation
(Exact Name of Registrant as Specified in Charter)
Delaware 1-6553 16-0958146
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
968 James Street, Syracuse, New York 13203
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:(315) 424-0513
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 1. Changes in Control of Registrant.
On March 27, 1997, Madison Dearborn Capital Partners L.P. and Madison
Dearborn Capital Partners II, L.P. (together with Madison Dearborn Capital
Partners, L.P., the "MD Investors") acquired (i) from Carrols Holdings
Corporation ("Holdings") (the parent company of the Registrant), 283,334 shares
of common stock, $.01 par value per share, of Holdings (the "Common Stock")
(such shares of Common Stock are referred to herein as the "Company Shares") and
(ii) from Atlantic Restaurants, Inc. ("Atlantic"), then the sole stockholder of
Holdings, 283,333 of the outstanding shares of Common Stock held by Atlantic,
(together with the Company Shares, the "MD Shares"), pursuant to a Stock
Purchase Agreement, dated as of February 25, 1997, which is filed as an Exhibit
to the Form 10K of Carrols Corporation (the "Company") for 1996 and is hereby
incorporated by reference herein and an amendment thereto dated March 27, 1997,
which is filed as an Exhibit hereto and is hereby incorporated by reference
herein (together, the "Purchase Agreement"). The aggregate purchase price for
the MD Shares was approximately $61 million in cash, of which approximately
one-half was paid to Holdings. The source of the consideration was the
investment capital of each of the MD Investors.
As a result of the aforementioned sales, the MD Investors and Atlantic each
own approximately 44% of the outstanding shares of Common Stock on a fully
diluted basis. Additionally, pursuant to the Purchase Agreement, certain members
of senior management of Holdings purchased 10,810 shares of Common Stock and
were granted options, which when combined with the shares of Common Stock
purchased, equal 12% of the outstanding shares of Common Stock on a fully
diluted basis. The transactions described above are referred to herein as the
"MD Investment".
In connection with the MD Investment, Holdings, Atlantic, the MD Investors,
Alan Vituli and certain other members of senior management (collectively, the
"Stockholders") entered into a stockholders agreement (the "Stockholders
Agreement"), which is filed as an Exhibit to the Company's Form 10K for 1996 and
is hereby incorporated by reference herein. Pursuant to the Stockholders
Agreement, the Stockholders will elect a new Board of Directors of Holdings and
Holdings will elect a new Board of Directors of the Company. The persons
nominated to the new boards are Benjamin D. Chereskin, Robin P. Selati and an
independent director who will be selected by the MD Investors, Paul Durrant,
David J. Mathies, Jr. and an independent director who will be selected by
Atlantic, and Mr. Vituli and Mr. Daniel T. Accordino, each an executive officer
of the Company. The Stockholders Agreement also includes restrictions on the
transfer of Common Stock, restrictions on and covenants of Holdings and the
provision of preemptive, tag along and drag along rights granted to the parties
thereto.
Item 2. Acquisition or Disposition of Assets.
On March 28, 1997, the Company acquired 24 Burger King restaurants
(including one restaurant under construction) for an aggregate purchase price of
$21 million in cash, pursuant to two separate Purchase and Sale Agreements, each
dated as of January 15, 1997, by and between the Company, Omega Services, Inc.
("Omega") and Harold W. Hobgood, as Omega's agent (the "Omega Transactions"). A
copy of each such agreement is filed as an Exhibit hereto and is hereby
incorporated by reference herein. The Company funded the purchase price of each
such purchase by using (i) proceeds from the sale of the MD Shares and (ii)
funds borrowed from Texas Commerce Bank National Association and other lenders
pursuant to a loan agreement which is referred to in Item 5 herein. The purchase
prices for such purchases were determined through negotiations among the
principals of the parties.
Item 5. Other Events.
On March 27, 1997, the Company entered into a Loan Agreement among the
Company, Texas Commerce Bank National Association, as Agent, and other Lenders
who are parties thereto (the "Loan Agreement"). The Loan Agreement provides for
(i) a $127,000,000 Advance Loan Facility under which the Company may borrow up
to 75% of the purchase costs incurred in connection with permitted acquisitions
of the Company and to repurchase up to $25,000,000 of the 11 1/2% Senior Notes
due 2003 (the "Senior Notes") of the Company if the holders of such notes
exercise the right to cause the Company to repurchase such Senior Notes due to a
change of control event; and (ii) a $25,000,000 Revolving Loan Facility to be
used to refinance the Company's existing revolving credit facility with Heller
Financial, Inc., to finance permitted acquisitions and new store development by
the Company, and for other working capital and general corporate purposes.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
This report does not include the financial statements and pro forma
financial information required by Items 7(a) and 7(b) to Form 8K. Pursuant to
Items 7(a)(4) and 7(b)(2) to Form 8K, such financial statements and pro forma
financial information will be filed by an amendment to this report no later than
60 days from the date hereof.
c. Exhibits
10.38 First Amendment to the Stock Purchase Agreement dated March 27, 1997
by and among Carrols Holdings Corporation, Atlantic Restaurants, Inc. Madison
Dearborn Capital Partners, L.P. and Madison Dearborn Capital Partners II, L.P.
10.39 Purchase and Sale Agreement dated as of January 15, 1997 by and
between Carrols Corporation, as Purchaser, Omega Services, Inc. as Seller and
Mr. Harold W. Hobgood as Omega's Agent.
10.40 Purchase and Sale Agreement dated as of January 15, 1997 by and
between Carrols Corporation, as Purchaser, Omega Services, Inc. as Seller and
Mr. Harold W. Hobgood as Omega's Agent.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Carrols Corporation
Dated: April 11, 1997 By: /s/ ALAN VITULI
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Alan Vituli