Owner of Burger King, Tim Hortons to Buy Popeyes for $1.8B
(CBS NEWS) Restaurant Brands International says it’s buying Popeyes for $1.8 billion, bringing the chicken chain under the same corporate umbrella as Burger King and Tim Hortons.
The move fits with Restaurant Brands’ approach of taking over well-known fast-food chains it sees as having the potential for significant expansion. The deal gives shareholders of Popeyes Louisiana Kitchen $79 per share, representing a 27 percent premium from its average price on Feb. 10.
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. Shares were up around 6% Tuesday to almost $57.50 after news of the deal was announced.
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.