CKE Restaurants Inc., parent of fast food restaurant chains Carl's Jr. and Hardee's, said Friday that it would be bought by a private equity firm for $619 million.
Thomas H. Lee Partners will acquire the Carpinteria, Calif., company for about $928 million while assuming about $309 million in net debt.
The Boston-based private equity firm will offer CKE shareholders a 24% premium off Thursday's closing price, giving them $11.05 in cash for each share.
"We are committed to making this great company even better, and to working together with the entire organization to provide an even stronger foundation for value creation, expansion and profitable growth," Todd Abbrecht, managing director of Thomas H. Lee, said in a statement.
In 2006, the firm joined Bain Capital Partners and the Carlyle Group to buy Dunkin' Brands Inc., the parent of Dunkin' Donuts and Baskin-Robbins, for $2.4 billion in cash.
The CKE deal is expected to close in the second quarter of this year if it is approved by shareholders and regulators. But CKE will accept other acquisition proposals until April 6.
CKE shares spiked 25% in morning trading, up $2.25 to $11.16.
More than 1,200 Carl's Jr. restaurants are operating with 11,000 employees in several Western states and several countries. Nearly 2,000 Hardee's restaurants exist in the Southeast and Midwest and the Middle East.
The company has garnered attention for its comfort food, such as grilled cheese bacon burgers, and its raunchy ads featuring scantily-clad starlets such as Paris Hilton and Kim Kardashian.
But CKE's financial situation has been shaky. Sales at restaurants open at least a year plunged 5.2% at Carl's Jr. for the third quarter of the 2010 fiscal year. Sales slipped 1.8% at Hardee's.
For the period ending Jan. 25, sales nose-dived 8.7% at Carl's Jr. while sinking 2.5% at Hardee's, the company said earlier this month. CKE blamed the sales declines on the stagnant economy and high unemployment among its customer base, as well as the continuing "deep-discount burger wars" and severe winter weather.
Revenue through the 2010 fiscal year is down more than 4% to $1.08 billion, compared with $1.13 billion in 2009.
CKE is using UBS Investment Bank as a financial advisor during the acquisition. Thomas H. Lee has turned to Bank of America Merrill Lynch and Barclays Capital, whose affiliates are also helping to fund the deal.