Parent company of Tim Hortons to buy Popeyes for $1.8B
A Mississippi attorney is suing Popeyes after he says he choked when he had to eat a piece of friend chicken with his hands because a knife wasn't included in his drive-thru order. (Mike Mozart / Flickr)
Aleksandra Sagan, The Canadian Press
Published Tuesday, February 21, 2017 8:54AM EST
Last Updated Tuesday, February 21, 2017 10:22AM EST
TORONTO -- The parent company of Tim Hortons and Burger King is making a move to add fried chicken with an offer to buy Popeyes in a friendly deal.
Restaurant Brands International (TSX:QSR) said Tuesday it will pay US$1.8 billion for the Louisiana-style fried chicken chain. That translates to US$79 per share in Popeyes Louisiana Kitchen Inc., which trades on the Nasdaq composite.
"We're really excited we're adding another iconic and successful brand, one that has really rich Louisiana heritage that's going to resonate with guests all around the world," said RBI CEO Daniel Schwartz in an interview.
Schwartz said RBI plans to accelerate Popeyes' growth in the U.S. and internationally. The company currently has more than 2,600 restaurants, mostly in the U.S., with 621 international locations.
"There is no reason that this brand can't be multiple times its size in many, many years from now," said Schwartz, adding that Popeyes is currently growing at a similar pace to Burger King when RBI first acquired that fast-food chain.
In 2010, Burger King was adding 173 net new restaurants annually. Last year, that number grew to 735.
Schwartz credits that to RBI's master franchisee joint venture growth model, which gives one or a group of franchisees the rights to grow the chain in a specific area. He said RBI would use the same model to grow Popeyes, whose footprint he says is underpenetrated compared to competitors like KFC.
Popeyes shares soared on the news, reaching US$79.03 in early morning trading, a jump of about 19.5 per cent from Friday's close. RBI stock was at C$74.93 on the S&P/TSX composite, up six per cent.
The transaction will deliver immediate value to Popeyes shareholders, said CEO Cheryl Bachelder in a news release jointly issued with RBI.
The proposed takeover requires various approvals and support from more than half of Popeyes' shareholders, but RBI expects the deal to close by early April. RBI's management is expected to continue to operate the U.S. business.
RBI has its headquarters in Oakville, west of Toronto, and more than 20,000 restaurants in more than 100 countries and U.S. territories.