Restaurant Brands International Inc (NYSE: QSR) has reached an agreement to acquire all shares of Carrols Restaurant Group Inc (NASDAQ: TAST) for $9.55 per share in an all-cash transaction.
The offer represents an aggregate total enterprise value of approximately $1.0 billion, a 23.1% premium to Carrols' 30-day volume-weighted average price as of January 12, 2024.
Carrols is the largest Burger King franchisee in the United States today, operating 1,022 Burger King restaurants in 23 states and 60 Popeyes restaurants in six states.
The transaction is part of Burger King's Reclaim the Flame plan to accelerate sales growth and drive franchisee profitability.
Burger King plans to invest about $500 million of capital, funded by Carrols' operating cash flow, to remodel about 600 acquired restaurants that are not currently considered modern image.
Burger King plans to re-franchise most of the portfolio to new or existing smaller franchise operators who live in their local communities.
The re-franchising exercise will be completed in five to seven years.
The transaction is expected to be completed in the second quarter of 2024.
Restaurant Brands held $1.3 billion in cash and equivalents as of September 30, 2023.
Price Action: QSR shares are trading lower by 3.21% at $75.93. TAST stock is trading higher by 13% at $9.52 on the last check Tuesday.