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RBI finalizes acquisition of largest U.S. Burger King franchisee

EditorIsmeta Mujdragic
Published 05/16/2024, 09:33 AM

TORONTO - Restaurant Brands International Inc. (TSX: NYSE:QSR) (NYSE: QSR) (TSX: QSP), a global quick-service restaurant company, has announced the completion of its acquisition of Carrols Restaurant Group (NASDAQ:TAST), Inc., the largest Burger King franchisee in the United States. The all-cash transaction, valued at approximately $1.0 billion, was finalized for $9.55 per share for all issued and outstanding shares not already owned by RBI or its affiliates.

Today, RBI also revealed the amendment of its existing Credit Agreement, increasing its term loan B facility from $5.2 billion to $5.9 billion. This increase will fund the Carrols acquisition, including the payoff of Carrols' credit agreement and the redemption of its 5.875% senior notes due 2029.

The acquisition is part of RBI's "Reclaim the Flame" plan which includes a $500 million investment to reimagine over 600 Carrols restaurants. Following the renovation, RBI intends to refranchise the majority of these locations to new or existing smaller franchise operators within the next seven years.

Carrols, a significant player in the North American restaurant franchisee market, has been operating Burger King restaurants since 1976 and Popeyes restaurants since 2019. With this acquisition, RBI, which also owns TIM HORTONS®, POPEYES®, and FIREHOUSE SUBS®, expands its already substantial portfolio of over 30,000 restaurants worldwide.

This strategic move is expected to enhance RBI's presence in the fast-food industry, building on its annual system-wide sales of over $40 billion.

The information in this article is based on a press release statement from Restaurant Brands International Inc.

InvestingPro Insights

Restaurant Brands International Inc. (RBI) has made a strategic expansion with the acquisition of Carrols Restaurant Group, and its financial metrics reflect a company that is navigating growth with a steady hand. According to data from InvestingPro, RBI boasts a market capitalization of $32.14 billion, underscoring its significant presence in the quick-service restaurant sector.

One of the key InvestingPro Tips for RBI is the company's track record of raising its dividend for 9 consecutive years, demonstrating a commitment to returning value to shareholders. Additionally, the company maintains a relatively low price-to-earnings (P/E) ratio of 18.2, which is appealing when paired with near-term earnings growth. This combination suggests that RBI is trading at a discount relative to its earnings potential, offering an attractive entry point for investors.

From a revenue standpoint, RBI has seen a growth of 7.93% over the last twelve months as of Q1 2024, with gross profit margins standing at a healthy 39.77%. This indicates a strong ability to convert sales into profit, a crucial factor for investors assessing the company's operational efficiency. Moreover, the company's dividend yield as of the latest data is 3.25%, which is competitive in the current market environment.

For readers looking to delve deeper into RBI's financial health and future prospects, InvestingPro offers additional insights and tips. Currently, there are 6 more InvestingPro Tips available, which can be accessed by visiting the InvestingPro platform. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain comprehensive analysis that can inform your investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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