Toronto, Canada – Restaurant Brands International (RBI) has announced two new investments to drive growth in China. The first one includes the acquisition of Popeyes China, and the co-investment with Cartesian Capital into the business of TH International Limited, which operates Tims China.
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. RBI’s total amount of capital outlay will be up to US$45m for the two transactions.
First off, RBI has agreed to acquire 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 today.
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.
Meanwhile, 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 7 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 at 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.”
