Burger King, Tim Hortons Parent to Buy Popeyes for $1.8B - NBC 10 Philadelphia

Burger King, Tim Hortons Parent to Buy Popeyes for $1.8B

Restaurant Brands has more than 20,000 locations globally, and Popeyes would give it about another 2,600

    processing...

    NEWSLETTERS

    Burger King, Tim Hortons Parent to Buy Popeyes for $1.8B
    Getty Images
    Restaurant Brands International, the corporate parent of Burger King and Tim Hortons, says it is acquiring Popeyes Louisiana Kitchen for a whopping $1.8 billion.

    Restaurant Brands International says it'll pay $1.8 billion for Popeyes, bringing the fried chicken chain under the same corporate umbrella as Burger King and Tim Hortons.

    The move fits Restaurant Brands' strategy of taking over well-known fast-food chains that it believes have the potential for wider expansion. The deal gives Popeyes shareholders $79 per share, a 19 percent premium from its closing price on Friday.

    The deal is expected to close by ealry April 2017, CNBC reported.

    Restaurant Brands was created after Burger King, controlled by Brazilian investment firm 3G Capital, bought Tim Hortons in 2014. The corporate name it took signaled the company's aim of expanding its stable of fast-food chains. In the meantime, Restaurant Brands has been striking deals with local operators to open additional Burger Kings around the world.

    However, Cowen analyst Andrew Charles said last week that the company has not yet accomplished its goal of expanding Tim Hortons internationally. Although Tim Hortons has signed three master franchise development agreements in the Philippines, the United Kingdom and Mexico, Charles noted no stores have yet opened under those deals.

    Stephen Anderson, a Maxim Group analyst, noted last week that Popeyes has had stronger sales performance worldwide in the past two years compared to Burger King and Tim Hortons.

    Restaurant Brands has also been improving its financial results by cutting costs, the same stragtegy 3G has employed with another of its investments, Kraft Heinz.

    Josh Kobza, chief financial officer of Restaurant Brands, said Tuesday said the company plans to accelerate Popeyes' expansion, as it has done with Burger King. According to CNBC, Popeyes will continue to be managed independently in the U.S. after the sale.

    Restaurant Brands International Inc., based in suburban Toronto, has more than 20,000 locations globally, and Popeyes would give it about another 2,600. The company makes money from fees it charges franchisees who operate Burger King and Tim Hortons restaurants. By comparison, McDonald's Corp. had more than 36,800 locations around the world at the end of 2016. Yum Brands, which owns KFC, Pizza Hut and Taco Bell, has more than 43,600.