Restaurant Brands International Buys Popeye's To Improve Restaurant's Growth

March 28, 2017

Restaurant Brands International Buys Popeye's To Improve Restaurant's Growth

Restaurant Brands International, which owns both Tim Hortons and Burger King, will pay $1.8 billion for Popeye's on plans to boost the chicken chain's growth.

This purchase fits into the company's strategy of taking control of fast-food chains that the company believes it can expand. Popeye's is seen in most states, most locations are noted in the eastern portion of the U.S.

Chief Financial Officer Josh Kobza said the company will speed the expansion for Popeye's up like it did with Burger King.

Restaurant Brands was developed in 2014 after Burger King purchased Tim Hortons. The corporate name was a signal of the company's goal to boost the stability of fast-food chains. Restaurant Brands has struck a number of deals with local operations to open many more Burger Kings in the world.

Andrew Charles, an analyst with Cowen, said the company still has yet to finish its expansion of Tim Hortons. While Tim Horton's has three master franchise development in agreements in the United Kingdom, Mexico and the Philippines, no stores have been opened.

Maxim Group analyst Stephen Anderson said Popeye's has more powerful sales performed compared to Tim Hortons and Burger King.

The Toronto-based Restaurant Brands International Inc. has over 20,000 locations around the world - Popeye's gives it another 2,600.

Yum Brands, which holds the rights to Taco Bell, Pizza Hut and KFC, is over 43,600 locations. McDonald's Corp. has over 36,800 locations. Restaurant Brands gets money from the franchise fees it charges for Tim Hortons and Burger King Restaurants. It reduced costs to boost its financial strength - a strategy that 3G used for its Kraft Heinz investment.