Quaker Steak & Lube announced that TravelCenters of America LLC has agreed to acquire Quaker Steak & Lube’s restaurant and related assets for around $25 million.
Founded in 1974, Quaker Steak & Lube has more than 50 locations across 16 states. TA, a Fortune 500 publicly-traded company, operates over 500 full- and quick-service restaurants, principally located in 253 full-service travel centers and 184 convenience stores in 43 states.
“TravelCenters of America brings in-depth experience and resources to help Quaker Steak & Lube build upon our system’s positive performance and help us fully realize our expansion goals,” says Greg Lippert, chief executive officer of Quaker Steak & Lube. “TA has stated its desire to use the existing company and franchisee Quaker Steak & Lube locations that it acquires as a core around which to expand Quaker Steak & Lube into a nationally recognized brand.”
Lippert adds, “Our future at The Lube is bright. We foresee a positive impact from these transactions to our restaurants. In fact, under TA, we’re confident that the number of our locations will continue to grow and our franchise owners, employees and suppliers will benefit from a stronger Quaker Steak & Lube.”
“Quaker Steak & Lube’s unique brand and award-winning menu is a great fit for TA’s primary customers—professional truck drivers and highway motorists,” says Tom O’Brien, TA’s chief executive officer. “We’re confident that our existing foodservice operations will provide TA the tools it needs to make Quaker Steak & Lube a nationally-recognized restaurant brand. By converting some of our existing full-service restaurants to The Lube, we will enhance the variety of food and hospitality options that our travel centers already provide to professional drivers, at the same time expand the awareness of Quaker Steak & Lube. Also, we expect to expand The Lube’s existing franchise program, as well as its company-operated restaurants separate from our travel centers.”
Quaker Steak & Lube submitted a bankruptcy filing that includes the asset purchase and $2 million debtor in possession financing agreements with TA. Pursuant to the purchase agreement, TA has placed a substantial deposit toward the purchase price and has agreed to offer employment following the closing to substantially all of Quaker Steak & Lube’s current employees. The agreements are subject to bankruptcy court approval, which is expected in early 2016, and other conditions including, but not limited to an auction process supervised by the bankruptcy court. The auction process is expected to be subject to certain rules regarding topping bids including, but not limited to, TA’s right to receive a topping fee, expense reimbursements and repayment of the debtor in possession financing plus interest.