Restaurant Brands International (RBI), the parent company of Burger King, has finalized a deal to purchase Carrols Restaurant Group for a sum of $1 billion.
In an all-cash transaction, RBI will acquire all outstanding shares of Carrols at a rate of $9.55 per share, including those not currently held by RBI.
RBI presently possesses a 15% stake in Carrols’ equity and intends to complete the acquisition of the remaining equity as part of the transaction.
The transaction is scheduled to conclude in the second quarter of 2024, contingent upon regulatory approvals and standard closing conditions, including the approval of Carrols’ stockholders.
Carrols manages a network of 1,022 Burger King restaurants spanning 23 states in the US, generating $1.8 billion in sales for the 12-month period ending on September 30, 2023.
For Burger King, the acquisition represents a strategic maneuver as part of its “Reclaim the Flame” plan, geared towards accelerating sales growth and bolstering franchisee profitability.
Burger King US and Canada president Tom Curtis said, “Carrols has demonstrated strong and improving restaurant operations over the years.
“This acquisition is an exciting accelerator to our Reclaim the Flame plan that is focused on relentlessly pursuing a better experience for our guests.
“We are going to rapidly remodel these restaurants over the next five years or so and put them back into the hands of motivated, local franchisees to create amazing experiences for our guests.”
Carrols president and CEO Deborah Derby stated, “Today’s announcement is a testament to our more than 24,000 Carrols team members who have helped drive the company to record levels of profitability over the past 12 months.
“These results have allowed us, through this transaction, to deliver immediate and certain value to Carrols’ shareholders at an attractive premium to the company’s current and historical share prices.
“Additionally, we believe our team members will now have additional opportunities as part of the greater RBI family – in our office, in the field and especially in our restaurants, including for long-time managers who may want to become franchisees themselves.”
The acquisition follows a $400m investment by Burger King in September 2022, focusing on remodels, operations, marketing and technology enhancements.
Burger King intends to allocate $500 million for the renovation of 600 restaurants, utilizing Carrols’ operational cash flow. The remodeling efforts aim to achieve a contemporary image and are scheduled to take place over the five-year period leading up to 2028.
Carrols’ operators, in collaboration with Burger King’s operations teams, will jointly manage the acquired restaurants.
The restaurant chain’s long-term strategy involves refranchising the majority of the portfolio to smaller franchise operators within local communities.
Post franchising, which is expected to take five to seven years, Burger King will retain a strategic portfolio of two hundred restaurants.
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