News

RBI acquires Popeyes for $1.8B

February 21, 2017

Restaurant Brands International stock is bouncing upward on confirmation this morning that the Burger King and Tim Hortons chains owner is buying the 45-year-old spicy chicken chain, Popeyes Louisiana Kitchen. The news first leaked as a Reuters news story Monday night, attributed to an unnamed source close to the deal. 

This morning, Restaurant Brands International Inc. confirmed the report, saying that the companies have "reached an agreement for RBI to acquire Popeyes for $79.00 per share in cash, or $1.8 billion," according to  a company news  release.

Popeyes has canceled its scheduled Thursday morning earnings call and webcast, and will file its fiscal 2016 results and annual report for the year ending Dec. 25, 2016 after close of market Wednesday. 

The Popeyes chain had 2,688 operating restaurants worldwide at the close of 2016. Its acquisition by RBI adds one of the world's largest fast food chicken chains to a portfolio that already includes more than 20,000 restaurants in more than 100 countries. 

"Popeyes is a powerful brand with a rich Louisiana heritage that resonates with guests around the world," RBI CEO Daniel Schwartz said in the news release. "With this transaction, RBI is adding a brand that has a distinctive position within a compelling segment and [with] strong U.S. and international prospects for growth. 

"As Popeyes becomes part of the RBI family we believe we can deliver growth and opportunities for all of our stakeholders including our valued employees and franchisees. We look forward to taking an already very strong brand and accelerating its pace of growth and opening new restaurants in the U.S. and around the world."

After the transaction closes, Popeyes will continue to manage the chain independently in the U.S., while benefitting from the global scale and resources of RBI, the release said. RBI to increase the pace of the Popeyes U.S. and international growth. 

"As Popeyes enters its 45th year, its success reflects the amazing brand entrusted to us by founder Al Copeland Sr. and the unique high-trust partnership that we enjoy with our franchise owners," Popeyes CEO Cheryl Bachelder said in the news release. 

"RBI has observed our success and seen the opportunity for exceptional future unit growth in the U.S. and around the world. The result is a transaction that delivers immediate and certain value to the Popeyes shareholders."

Popeyes shareholders will receive $79 in cash per share at closing, representing a premium of 27 percent based on Popeyes 30-trading day volume weighted average price on Feb. 10, the last day of trading before news of the potential sale was first leaked, the company said. 

RBI will finance the transaction with cash on hand and a financing commitment from J.P. Morgan and Wells Fargo. Following completion of the tender offer, RBI will acquire all remaining shares through a second-step merger at the same price, with the total transaction expected to close in early April. 

Cover photo: iStock