Owner of Tim Hortons and Burger King fast food chains, Restaurant Brands International Inc., may be acquiring Popeye’s Louisiana Kitchen Inc., according to sources who are familiar to the matter. The sources mentioned this on this Monday.
This deal, according to some investors, will be likely valuing Popeye’s at more than a sum total of 1.7 billion dollars. Even Restaurant Brands International Inc., an Oakville, Ontario-based company believes this to be true. The company also believes that they can use their international reach to introduce Popeye’s Louisiana style delicious buttermilk biscuits and fried chicken to more of their globally spread diners.
This particular deal looks like a small sized consolation prize for 3G Capital, which is a shareholder in Restaurant Brands International Inc. 3G Capital recently lost a bid of 143 Billion dollars this week for merging their biggest holding, Kraft Heinz Co., a food conglomerate with Unilever Plc, a consumer products firm.
This particular deal would be announced as soon as possible, maybe even in this week, according to people familiar with the situation. These people did not ask to be identified as these negotiations are marked confidential for now. Popeye’s had declined to comment and Restaurant Brands International Inc. didn’t respond to the request for comment yet.
Popeye’s began in a New Orleans suburb as a southern restaurant for fried chicken on the Run and this was 45 years ago. Pop Singers like Beyoncé also love this fried chicken restaurant. Popeye’s has since then expanded to 1600 restaurants in the United States and about 400 in other nations as well bringing the total reach to about 2000 diners.
Popeye’s has also benefited from customer loyalty, which is really strong. The company also has a really strong program of restaurant refurbishment, which has benefited the company.
According to IBISWorld, a data service, the fast food industry’s 10 percent part is fast foods, which are chicken based and the market share of Popeye’s is growing quickly. Some of the globally spread largest brands that operate in this sector are the privately held Yum! Brand Inc.’s Kentucky Fried Chicken and Chick-fil-A.
Jorge Paulo Lemann, who is a Brazilian billionaire and who has a controlling interest in 3G Capital, the private equity firm, owns more than 43 percent of Restaurant Brands International Inc.’s voting shares. This private equity firm has made a name for themselves by acquiring a lot of major consumer companies, which are US based, including Kraft Heinz Inc.
The formation of Restaurant Brands was in 2014 when 3G Capital-owned Burger King had acquired the Canadian doughnut and coffee chain Tim Hortons Inc. for about 11 billion dollars. Warren Buffett’s Berkshire Hathaway Inc. also committed 3 billion dollars to finance that deal as it has been a long time partner of 3G Capital. Including Popeye’s to their chain of restaurants and providing the taste of Popeye’s worldwide would definitely be beneficial for this food chain restaurants firm.