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Wendy's (WEN) Expands in Asia with First Kitchen Acquisition

The Wendy's Company’s WEN Japanese franchisee – Wendy's Japan, a wholly owned subsidiary of Higa Industries Co., Ltd. – announced that it has the inked a definitive agreement with Suntory Holdings Ltd. Per the deal, Wendy's Japan will acquire 136 restaurants owned by First Kitchen Ltd. The deal is expected to close at the end of this month.

In an effort to facilitate the First Kitchen acquisition, The Longreach Group – a private equity firm based in North Asia – has purchased a majority stake in Wendy's Japan.

Wendy's Japan plans to expand its presence in the country by converting the current First Kitchen restaurants into Wendy's First Kitchen restaurants and building new units in the upcoming quarters. Wendy's First Kitchen will offer a revamped menu and refurbished décor, which was being tried out in Tokyo.

The two First Kitchen locations, open since 2015 in the Roppongi and Ueno sections of Tokyo, has witnessed immense demand from consumers, which encouraged Wendy’s to try to cash in on the popularity of the brand. Wendy's First Kitchen will offer consumers a range of assorted cuisines – delicious hamburgers and chicken sandwiches, as well as pasta and other First Kitchen favorites.

Note that Wendy’s is focused on international expansion in four primary markets – Japan, India, Brazil and the Middle East – the regions where the company has substantial potential over the next few years. Ther latest acquisition is part of the same strategy.  

Wendy’s carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include Restaurant Brands International Inc. QSR, Famous Dave's of America Inc. DAVE and Carrols Restaurant Group, Inc. TAST. All these stocks sport a Zacks Rank #1 (Strong Buy).

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