Judge OKs Sale of Quaker Steak to TravelCenters
AKRON, Ohio – U.S. Judge Alan M. Koschik has approved the sale of Quaker Steak & Lube’s assets to TravelCenters of America following a hearing Tuesday that resolved remaining objections, determined some moot and noted those that were settled by stipulation outside of bankruptcy court.
The $25 million sale was arranged as part of Quaker Steak’s Nov. 15 filing for Chapter 11 bankruptcy reorganization. The final order approving the sale was entered Wednesday.
TravelCenters of America LLC, based in Westlake, operates 252 travel centers and 204 convenience stores in 43 states. The acquisition of Quaker Steak’s restaurants and its brand is integral to “help us fully realize our expansion goals,” said the CEO of TravelCenters, Greg Lippert, when the purchase agreement was announced.
In July 2014, Quaker Steak, based in Sharon, Pa., hired a Texas investment banking firm, Mastodon Ventures Inc., to conduct a financial analysis and renegotiate its debt. Efforts followed to sell the chain, culminating in October with the TravelCenters asset purchase agreement announced as part of Quaker Steak’s bankruptcy petitition.
By order of the court, competing bids were solicited for the 53-store casual dining chain but none were received by the March 11 deadline, negating the need for an auction tentatively scheduled for March 16.
An affidavit from Robert S. Hersch, president of Mastodon Ventures, filed with the court March 21, states his company “engaged in a comprehensive marketing and sale process in an effort to solicit additional bids.”
In January a “teaser” description of Quaker Steak’s business was sent to “296 potential strategic and financial buyers.” Of those, 68 executed confidentiality agreements, he noted, and discussions were held with each of the parties.
TravelCenters describes itself as “the largest publicly traded operator/franchisor of full-service travel centers in the United States,” and its executives noted during the bankruptcy proceedings that it is prepared to take over Quaker Steak’s operations as soon as the sale is consummated.
TravelCenters reported a net loss of $1.6 million compared to net income of $34.3 million in the fourth quarter of 2014. Full-year net income of $27.7 million compares to $61 million in 2014, according to financial results released March 14.
The company attributed the decline to low fuel prices.
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