Burger King owner to acquire Carrols for $1bn

The acquisition is a strategic move within the company's Reclaim the Flame plan to accelerate sales growth and boost franchisee profitability.

Surya Akella January 16 2024

Restaurant Brands International (RBI), owner of fast-food restaurant chain Burger King, has reached an agreement to acquire Carrols Restaurant Group for $1bn.

The all-cash transaction will see RBI purchasing all issued and outstanding shares of Carrols that it does not already hold for $9.55 per share.

RBI currently holds 15% of Carrols' equity. It will proceed to acquire the remaining equity as part of the transaction.

The transaction will close in the second quarter of 2024. It is subject to regulatory approvals and other customary closing conditions, including the approval by Carrols' stockholders.

Carrols operates 1,022 Burger King restaurants across 23 states in the US. It contributed $1.8bn in sales for the 12 months ending 30 September 2023.

For Burger King, the acquisition is a strategic move within its "Reclaim the Flame" plan which aims to accelerate sales growth and boost 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 plans to invest $500m, funded by Carrols' operating cash flow, to remodel 600 restaurants to a modern image over the five years up to 2028.

Carrols' operators will join forces with Burger King's operations teams to 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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