Restaurant Brands to buy Popeyes China for US$15m, invest in Tims China

Restaurant Brands International (RBI) has acquired Popeyes China for US$15m and invested with Cartesian Capital into the Tims China business.

The move reflects RBI's confidence in China, one of the largest quick service restaurant (QSR) markets globally, and its commitment to drive growth in the market. RBI's total amount of capital outlay will be up to US$45M for the two transactions.

These transactions also follow the recent appointment of Patrick Siewert as senior advisor for RBI Asia-Pacific and showcase RBI's commitment to growth in the region.

As part of the acquisition, RBI has agreed to buy the Popeyes China business from Tims China on a cash-free debt-free basis based on an enterprise value of US$15M.

Following the transaction, RBI will own and operate Popeyes China, which opened its first restaurant in August 2023 and has 14 restaurants in Shanghai currently. The pace of restaurant growth is expected to ramp up through investments in local teams and restaurant development.

Longer-term, RBI expects to bring on local partners to form a more traditional master franchisee, similar to other Popeyes international markets.

To help fuel the growth of Tims China, Cartesian Capital and RBI agreed to invest up to US$50M of capital into the Tims China business via three-year convertible notes, of which US$40M will be issued at closing with the balance funded over the coming seven months, subject to certain operational and financial conditions.

Of the total, US$20M were issued to Cartesian and up to US$30M will be issued to RBI, including US$20M at close. Following the transaction, RBI will effectively have the right to appoint two directors to the Tims China Board and will see its equity ownership in the business increase to up to 18%, on an as converted basis.

The RBI team will continue to work closely with the Tims China management team and Board to drive growth in one of the fastest growing coffee markets in the world.

Rafael Odorizzi, president of Asia Pacific, RBI, said, "China is one of the most compelling long-term market opportunities for both our Popeyes and Tim Hortons brands. Popeyes China is off to a strong start and we are excited to unlock its development potential in one of the largest chicken QSR markets globally. Today's announcement allows Tims China to redouble its focus on quality restaurant development and providing Chinese consumers with our high quality Tims coffee and food offerings."

Yongchen Lu, CEO of Tims China, said, “We are pleased to announce this major funding package, which underscores the commitment of our founding shareholders to this dynamic business. This year will be a pivotal one for us, and fortifying our balance sheet is an important step forward towards ensuring our long-term success in this highly competitive market. This transaction enables us to drive growth in and intensify our focus on our core Tim Hortons brand.”

MARKETING-INTERACTIVE has reached out to RBI for more information. 

Related articles:

Chinese restaurant chain Jiumaojiu introduces franchise model to sub-brands
US fast food chain FIVE GUYS bites into Malaysia with Genting outlet
McDonald's and Five Guys troll Liverpool's red and yellow checkered kit