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A Whopper of a sale
September 1, 2010
The country's No. 2 burger chain has been sold. Burger King Holdings Inc. today announced that 3G Capital will acquire the company's stock for $4 billion, or $24 per share.
The definitive agreement, which was unanimously approved by the company's Board of Directors, includes assumption of Burger King's outstanding debt.
3G Capital is a global investment firm headquartered in New York City. The firm has received financing commitments for the purchase, including from JPMorgan Chase Bank, N.A. and Barclays Capital.
Terms of the agreement include stockholders receiving $24 in cash per share for all outstanding shares of Burger King's stock, which represents a 46 percent premium to the company's unaffected share price before buyout rumors hit the market.
The transaction is predicted to close in the fourth quarter of 2010. It is expected that 3G Capital will begin its tender offer for outstanding shares no later than Sept. 17.
Approximately 31 percent of Burger King's outstanding shares - owned by affiliates of TPG Capital LP, Goldman Sachs Capital Partners and Bain Capital Investors - will be tendered into the offer.
Burger King's chairman and CEO, John Chidsey, will remain in these capacities through the transition period. He will subsequently assume the role of co-chairman of the board, a newly created position.
When the transaction is officially closed, Alex Behring, managing partner of 3G Capital, will be also be appointed co-chairman of the board.
"The Burger King brand is one of the most recognizable and respected brand names in the world, and we are pleased that 3G Capital recognizes the value we have created in revitalizing the brand," Chidsey said. "We look forward to partnering with 3G Capital, whose proven track record as an investor, together with its financial and consumer brands experience, will serve to further strengthen the company, our restaurants and franchisees worldwide."
Behring added that the Burger King brand is a perfect fit for 3G Capital, which has a strong history of long-term investments in global consumer brands and retail companies. Affiliates of the firm and its partners have controlling or partial ownership stakes in global companies such as Anheuser-Busch InBev; Lojas Americanas, the largest non-food and online retailer in Latin America; and America Latina Logistica (ALL), the largest railroad and logistics company in Latin America.
Burger King operates more than 12,150 restaurants worldwide. Approximately 90 percent of those stores are franchised.
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