Benzinga | Jul 1, 2021 04:35PM EDT

Fiesta Restaurant To Sell Taco Cabana For $85M

* 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.