Restaurant Brands International Inc, owner of the Burger King and Tim Hortons fast-food chains, said on Tuesday it would acquire Popeyes Louisiana Kitchen Inc for US$1.8 billion in cash.
The deal is a bet by Oakville, Ontario-based Restaurant Brands that it can use its international reach to introduce Popeyes’ Louisiana-style fried chicken and buttermilk biscuits to more diners globally.
Popeyes shareholders will get US$79.00 for each share they hold, a 19.5 percent premium to the stock’s Friday close.
Popeyes, whose fans include pop singer Beyoncé, began 45 years ago as a Southern-fried “Chicken on the Run” restaurant in a New Orleans suburb. It has since expanded to more than 2,000 restaurants, of which 1,600 are in the United States.
Restaurant Brands was formed in 2014, when 3G Capital-backed Burger King acquired Canadian coffee and doughnut chain Tim Hortons Inc for US$11 billion.
Reuters reported on Monday that Restaurant Brands was nearing a deal to buy Popeyes, citing people familiar with the matter.
Private equity firm 3G Capital, which is controlled by Brazilian billionaire Jorge Paulo Lemann, owns about 43 percent of the voting shares in Restaurant Brands. 3G Capital has made a name by acquiring major U.S. consumer companies, including Kraft Heinz Co.
Restaurant Brands said on Tuesday it would finance the deal with about US$600 million of cash on hand and a US$1.3 billion financing commitment from J.P. Morgan and Wells Fargo.
The company was advised by Paul, Weiss, Rifkind, Wharton and Garrison LLP. Popeyes received financial advice from UBS and Genesis Capital LLC and legal counsel from King & Spalding LLP.
(Reporting by John Benny in Bengaluru; Editing by Maju Samuel and Sayantani Ghosh)
(This story has been edited by Kirk Falconer, editor of PE Hub Canada)
Photo courtesy of Reuters/Peter Jones