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3G Capital to float Burger King less than two years after taking it private

21 Jun 2012

Burger King’s Brazilian private equity owner 3G Capital Management is taking the company public again less than two years after buying it for $3.26bn.

The move comes two months after 3G announced its intention to sell a 29 per cent stake in the world’s second-biggest hamburger chain to London-listed Justice Holdings for $1.4bn.

Justice said it would merge with Burger King under that deal, with 3G keeping a 71 per cent holding in the new company.

Burger King chief financial officer Daniel Schwartz said at the time the Justice deal valued Burger King at an enterprise value of $8bn, double that of when it was acquired by 3G in October 2010.

He said, “3G still believes it is in the very early innings of what is going to be a very long-term investment in Burger King.

“It’s the right time for Burger King to be public in the US again.

“Our new investor base will help us maximise the brand’s future potential going forward.”

Burger King has increased its profits since the 3G buyout amid a change in tactics designed to help it be more competitive against industry giant McDonald’s and fellow burger chain Wendy’s.

The company is in the process of adding healthy options such as salads and smoothies to its menu to broaden its appeal to customers.

Burger King was acquired by a consortium of investors led by TPG, Bain and Goldman Sachs Capital for $1.5bn in 2002 after a summer of fraught negotiations with owner Diageo.

The chain went public in New York in 2006, but the consortium held on to a 31 per cent stake after the flotation.

Earlier this month it partnered with New York-based private equity firm Cartesian Capital for a new joint venture focused on aggressively expanding the brand’s presence in China.

The company also announced a joint venture in Russia to rapidly expand the brand’s presence in the country, with several hundred restaurants expected to open in the next several years.

Burger King also announced plans to open several hundred restaurants in Brazil last July.

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