Upcoming AWS Coverage on Wendy's Post-Earnings Results

LONDON, UK / ACCESSWIRE / May 30, 2017 / Active Wall St. blog coverage looks at the headline from Biglari Holdings Inc. (NYSE: BH) as the Company and Pacific Specialty Insurance Company announced on May 25, 2017, an agreement, under which Biglari would acquire all the outstanding shares of the parent Company of Pacific Specialty, and its affiliated agency, McGraw Insurance, Inc., from its shareholders Michael J. McGraw and John M. McGraw. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

One of Biglari Holdings' competitors within the Restaurants space, The Wendy's Company (NASDAQ: WEN), reported on May 10, 2017, its unaudited results for Q1 2017 which ended on April 02, 2017. AWS will be initiating a research report on Wendy's in the coming days.

Today, AWS is promoting its blog coverage on BH; touching on WEN. Get all of our free blog coverage and more by clicking on the link below:
http://www.activewallst.com/register/.

Acquisition Details

As per terms of the transaction agreement, Biglari, which owns fast food chain Steak 'n Shake, Maxim magazine, First Guard Insurance, and restaurant chain Western Sizzlin, will execute this acquisition through its subsidiary, BHIC Inc. The Company will acquire Western Service Contract Corporation, the parent Company of Pacific Specialty, and McGraw Insurance, Inc. for about $299.5 million, under which $24 million will be payable in cash at the closing of the transaction and $275.5 million as deferred payments. Out of these, Biglari has agreed to pay $175.5 million in cash over a period of 10 years and the remaining $100 million would be payable by a promissory note that matures upon the death of Micheal J. McGraw, or in 10 years following closing should his death occur within that time period. As per the agreement the interest rate during his lifetime is set at 6% per annum.

Pacific Specialty is set to benefit from the parent Company's strength and stability, and the ownership change will not have any material impact on its day-to-day operations, where Pacific Specialty and its affiliated agency will operate independently of Biglari Holdings' other insurance operations. Pacific Specialty views this agreement as a step to attain new profit milestones and achieve operational efficiency while operating under Biglari's portfolio. Pacific Specialty currently operates as an admitted insurance firm across all 50 states and the District of Columbia.

Sardar Biglari, Chairman and CEO of Biglari Holdings, said:

"For over 40 years the McGraw family has built an excellent insurance business with a distinguished performance. Mike McGraw will run the company as he has in the past, an essential part of our purchase decision. A family managed business such as the one by the McGraw's fits well within Biglari Holdings' collection of businesses. By becoming a constituent company of Biglari Holdings, Pacific Specialty and its affiliated agency will benefit from the parent company's strength and stability."

The transaction is subject to customary closing conditions, including regulatory approvals. The Company expects the deal to be completed in Q3 2017.

Earnings results

Biglari Holdings reported on May 05, 2017, its Q1 FY17 results for the period ending March 31, 2017. The Company announced net pre-tax operating earnings of $2.20 million for Q1 FY17, which was lower than $4.69 million for Q1 FY16. The investment partnership loss stood at $24.97 million versus an investment partnership profit of $78.97 for Q1 FY16. The net interest expenses for the period was $2.82 million in Q1 FY17 against $2.92 million for Q1 FY16. Biglari Holdings reported net loss of $15.82 million for Q1 FY17, while it reported net profits of $51.16 million for Q1 FY16.

Stock Performance

On Friday, May 26, 2017, Biglari Holdings' stock closed the trading session at $389.93, climbing 1.59% from its previous closing price of $383.83. A total volume of 5.19 thousand shares have exchanged hands, which was higher than the 3-month average volume of 4.27 thousand shares. For the last twelve months, the stock has gained 2.22%. Shares of the company have a PE ratio of 14.45 and currently have a market cap of $795.46 million.

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SOURCE: Active Wall Street