Restaurant Brands International Inc. has agreed to acquire its Popeyes China business, which has 14 restaurants in Shanghai, for $15 million and invest with Cartesian Capital into the business of TH International Ltd. and Tim Hortons, the company said Monday.
“The two transactions reflect RBI's confidence in China, one of the largest QSR markets globally, and its commitment to drive growth in the market,” the Toronto-based company said in press release. “RBI's total amount of capital outlay will be up to $45 million for the two transactions.”
Popeyes China, which opened its first restaurant in 2020, is expected to ramp up growth through investments in local teams and restaurant development, the company said. Longer-term, RBI expects to bring on local partners to form a more traditional master franchisee structure, similar to other Popeyes international markets.
In early 2023, RBI and TH International Inc. Ltd. had closed a deal for TH to become the exclusive operator and developer of Popeyes in mainland China,
To help fuel the growth of Tims China, Cartesian Capital and RBI agreed to invest up to $50 million of capital into the Tims China business via three-year convertible notes, of which $40 million will be issued at closing with the balance funded over the ensuing seven months, subject to certain operational and financial conditions.
Of the total, $20 million will be issued to Cartesian and up to $30 million will be issued to RBI, including $20 million 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.
"China is one of the most compelling long-term market opportunities for both our Popeyes and Tim Hortons brands,” said Rafael Odorizzi, RBI’s president of Asia Pacific, in a statement.
“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,” he said. The investments will allow Tims China to redouble its focus on quality restaurant development.
Restaurant Brands International owns the Tim Hortons, Burger King, Popeyes Louisiana Kitchen and Firehouse subs brands.
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