Restaurant Brands International Inc. is announcing two transactions in China, the acquisition of Popeyes China, and the co-investment with Cartesian Capital into the business of TH International Ltd. 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 $45 million for the two transactions.
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 $15 million. Following the transaction, RBI will own and operate Popeyes China, which opened its first restaurant in August 2023 and has 14 restaurants in Shanghai. The pace of restaurant growth is expected to ramp up through investments in local teams and restaurant development. Long-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 $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 coming seven months, subject to certain operational and financial conditions. Of the total, $20 million was 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. The RBI team will continue to work closely with the Tims China management team and board to drive growth.
"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," said Rafael Odorizzi, president of Asia Pacific.
These transactions follow the recent appointment of Patrick Siewert as senior advisor for Asia-Pacific.
