01—Abstract
Summary
Summary of the 8-K filed May 16, 2024. Cited figures are marked; the original filing is the authoritative source.
Restaurant Brands International Inc. (QSR) reported on May 16, 2024 that it completed its acquisition of Carrols Restaurant Group, Inc. (formerly NASDAQ: TAST) for $9.55a per share in cash, an aggregate total enterprise value of approximately $1.0 billion.
Carrols is the largest Burger King franchisee in the United States, operating 1,023 Burger King restaurants in 23 states and 59 Popeyes restaurants in six states. RBI stated it will invest a further $500Mb to accelerate the reimaging of more than 600 Carrols restaurants before refranchising the majority of the acquired portfolio to new or existing smaller franchise operators over the next seven years. To fund the deal, subsidiaries of RBI entered into Incremental Facility Amendment No. 6 and Amendment No. 9 to their Credit Agreement, increasing the existing term loan B facility from $5,162 million outstanding to a $5,912 million term loan B facility on the same terms.
Proceeds, together with cash on hand, were used to complete the acquisition, including payoff of Carrols' credit agreement and redemption and discharge of its outstanding 5.875%c senior notes due 2029. The amendment also changed the interest rate on Canadian dollar loans to be based on Term CORRA and made no other material changes to the credit agreement.
The filing is primarily a financing and transaction-completion disclosure. Investors should note the added debt load from the larger term loan, offset in part by the acquisition of a large Burger King franchise system that management plans to reimage and then refranchise.
02—Key points
Key Highlights
- Completed acquisition of Carrols Restaurant Group, Inc. at $9.55 per share in cash, approximately $1.0 billion aggregate total enterprise value
- Carrols is the largest Burger King franchisee in the U.S., with 1,023 Burger King restaurants in 23 states and 59 Popeyes restaurants in six states
- Term loan B facility increased from $5,162 million outstanding to $5,912 million on the same terms as the existing facility
- Acquisition funded by term loan proceeds plus cash on hand; included payoff of Carrols' credit agreement and redemption of its 5.875% senior notes due 2029
- Plan to invest a further $500M to reimage more than 600 Carrols restaurants before refranchising the majority of the portfolio over the next seven years
- Canadian dollar loans under the Credit Agreement now based on Term CORRA; no other material changes to the credit agreement
- Security and guarantees under the amended Credit Agreement remain the same as under existing facilities
03—Questions
Frequently Asked Questions
What did Restaurant Brands International acquire and for how much?
RBI completed its acquisition of all issued and outstanding shares of Carrols Restaurant Group, Inc. not already held by RBI or its affiliates, for $9.55 per share in an all-cash transaction, or an aggregate total enterprise value of approximately $1.0 billion.
How was the acquisition financed?
The proceeds from an increase in the term loan B facility, which rose from $5,162 million outstanding to $5,912 million, were used along with cash on hand to complete the acquisition, including paying off Carrols' credit agreement and redeeming and discharging its 5.875% senior notes due 2029.
What is RBI's plan for the Carrols restaurants?
RBI will invest a further $500M to accelerate the reimaging of more than 600 Carrols restaurants, then refranchise the majority of the acquired portfolio to new or existing smaller franchise operators over the next seven years.
Did the credit agreement amendment change any other terms?
The amendment changed the interest rate on Canadian dollar loans to be based on Term CORRA. The filing states that the amendment made no other material changes to the terms of the Credit Agreement, and the security and guarantees remain the same.
04—Continue