Restaurant Brands Group buys Firehouse Subs for $1bn

In recent years, the fast-food franchise operator has been picking up more chains Restaurant Brands International (RBI) is buying a chain of fast-food sandwiches and paninis for $1bn in cash, the company said on…

Restaurant Brands Group buys Firehouse Subs for $1bn

In recent years, the fast-food franchise operator has been picking up more chains

Restaurant Brands International (RBI) is buying a chain of fast-food sandwiches and paninis for $1bn in cash, the company said on Thursday, its latest acquisition.

The chain, which owns Burger King and Popeyes Louisiana Kitchen, will become a unit of Restaurant Brands after the deal closes, expected this month.

A lot of acquisitions in the fast-food sector – Pret A Manger, Wendy’s, Burger King – have been formed, in part, by using IPO-style financing to help finance deals

Restaurant Brands (RBI) also said in May it would buy Tim Hortons for about $11bn to expand in the United States.

Restaurant Brands said on Thursday it expects the acquisition of Firehouse Subs, which has about 1,000 locations, to lift adjusted earnings before interest, tax, depreciation and amortisation and adjusted earnings per share by 11 percent to 14 percent in 2019.

“By expanding the Firehouse brand within RBI’s existing markets, it will help us complement our existing in-market restaurant portfolio,” RBI CEO Daniel Schwartz said in a statement.

The fast-food sector is consolidating as consumers cut back on discretionary spending, citing rising consumer prices and unaffordable healthcare.

In recent years, the fast-food franchise operator has been picking up more chains, while bigger chains like McDonald’s Corp and Yum Brands Inc have snapped up coffee-and-doughnut chain Tim Hortons and Mexican chain Cheddar’s Scratch Kitchen, respectively.

Restaurant Brands said it plans to leverage Firehouse Subs’ strength in high-growth markets such as the Gulf region, the UK and the Mediterranean.

RBI shares fell 3.3 percent in morning trading.

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