Restaurant Brands International Inc. on Tuesday said it has agreed to buy Popeyes Louisiana Kitchen Inc. for $79 per share, or $1.8 billion.
The deal gives the Oakville, Ontario-based RBI a third brand to go along with Burger King and Tim Hortons. It also gives the company a brand with significant growth potential in its home market.
RBI also promises to pick up the pace of growth at Popeyes, both in its home market and in international markets. Popeyes has more than 2,600 locations, most in the U.S. That move would fit with RBI’s overall strategy, which has revolved primarily around aggressive unit growth of its two brands.
“Popeyes is a powerful brand with a rich Louisiana heritage that resonates with guests around the world,” Restaurant Brands CEO Daniel Schwartz said in a statement.
“With this transaction, RBI is adding a brand that has a distinctive position within a compelling segment and strong U.S. and international prospects for growth.”
RBI gets a brand that under CEO Cheryl Bachelder has become one of the strongest performing quick-service chains on Wall Street.
“I am proud of the superior results the Popeyes team has delivered in recent years,” Bachelder said in a statement. “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."
The price for Popeyes is a 27-percent premium based on the chicken chain’s 30-day trading average as of Feb. 10 — the last trading day before reports suggested that RBI was in the market for Popeyes. RBI is financing the deal with cash on hand and financing from J.P. Morgan and Wells Fargo.
Recent reports have suggested that Restaurant Brands was looking at the chicken chain, while others said the company had backed off. Yet Bloomberg reported on Monday that talks had begun again and that there was enough momentum for a deal.
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