Reuters — Restaurant Brands International, owner of the Burger King and Tim Hortons fast-food chains, said on Tuesday it would acquire Popeyes Louisiana Kitchen for US$1.8 billion in cash.
The deal is a bet by Oakville, Ont.-based Restaurant Brands that it can use its international reach to introduce Popeyes’ Louisiana-style fried chicken and buttermilk biscuits to more diners globally.
Popeyes shareholders will get $79 for each share they hold, a 19.5 per cent premium to the NASDAQ-traded stock’s Friday close (all figures US$).
Atlanta-based Popeyes, whose fans include pop singer Beyonce, began 45 years ago as a Southern-fried “Chicken on the Run” restaurant in a New Orleans suburb. As of last October, the chain includes more than 2,600 restaurants, of which over 1,900 are in the U.S.
Popeyes expanded into Canada starting in 1984 and now operates over 100 Canadian outlets, nearly all in Ontario. The company set up restaurants in Edmonton and Calgary late last year and is seeking other franchisees elsewhere in Canada.
Restaurant Brands was formed in 2014, when 3G Capital-backed Burger King acquired Canadian coffee and doughnut chain Tim Hortons for $11 billion.
Reuters reported Monday that Restaurant Brands was nearing a deal to buy Popeyes, citing people familiar with the matter.
Restaurant Brands said Tuesday it would finance the deal with cash on hand and a financing commitment from J.P. Morgan and Wells Fargo.
Popeyes CEO Cheryl Bachelder on Tuesday described the deal, which is expected to close in early April, as “a transaction that delivers immediate and certain value to the Popeyes shareholders.”
Restaurant Brands CEO Daniel Schwartz said the company “look(s) 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.”
— Reporting for Reuters by John Benny in Bangalore. Includes files from AGCanada.com Network staff.