While everybody looks at the NBA’s biggest blockbuster and potential trades moving closer to the deadline, most memorably the Demarcus Cousins-New Orleans Pelicans trade, Restaurant Brands International pulls a steal with their acquisition of popular southern fast food restaurant Popeye’s Louisiana Kitchen. RBI, owner of Burger King, are in talks to buy Popeye’s for $1.8 billion dollars ($97 a share). From the outside looking in, the deal comes out of left field. After research, it doesn’t seem as if the company is in any financial trouble. It was actually experiencing rapid growth, showing more promise in it’s performance than even Burger King and Tim Hortons, a coffee franchise also owned by Restaurant Brands International. Various Popeye’s location put up $1.4 million in revenue and the brand is more profitable than ever.
“We believe the Popeye’s acquisition would provide Restaurant Brands a concept that provides steady organic and unit growth in both the North American and overseas markets,”
-Stephen Anderson, analyst at Maxim Group
Burger King and Popeye’s, respectively, reign as the most notable fast-food chains outside of the power brand of McDonalds. Their marketing campaigns are excellent! Seeing the collaborative work that they’ll be doing will be intriguing. Even though RBI CEO Daniel Schwartz said that the company would be managed independently, the opportunity to put the Burger King Mascot and “Annie the Chicken Queen” in a commercial at the same time is too hard to pass up! Is RBI planning to challenge McDonalds for in their supremacy of the fast food landscape? According to Maxim Group analyst Stephen Anderson, the goal is to develop more of a stranglehold in overseas markets and in North America. “We believe the Popeye’s acquisition would provide Restaurant Brands a concept that provides steady organic and unit growth in both the North American and overseas markets.”
However, some business analyst don’t see the viability in RBI’s purchase of Popeye’s company. Cowen analyst Andrew Charles said, “The most apparent question to us is what does Restaurant Brands gain from acquiring Popeye’s? In our view, Restaurant Brands has not accomplished the primary objective of acquiring Tim Horton’s, which was growing the brand internationally.” If his assertion is correct, is RBI biting off more than they can choose in their acquisition? From how it looks, purchasing the company and allowing it to run the same as it has might be the best plan.
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