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RBI to acquire Carrols Restaurant Group for around $1bn

Restaurant Brands International (RBI) has reached an agreement to acquire all of Carrols Restaurant Group’s issued and outstanding shares that are not already held by RBI or its affiliates. Through the deal, RBI will acquire Carrols for $9.55 per share in an all-cash transaction, for an aggregate total enterprise value of around $1 billion. Carrols is the largest Burger King franchisee in the US and operates 1,022 Burger King restaurants in 23 states, as well as owning and operating 60 Popeyes restaurants in six states. The Burger King restaurants generated around $1.8 billion in system sales during the 12-months ended 30 September 2023. Tom Curtis, president of Burger King US and Canada, said: "This acquisition is an exciting accelerator to our ‘Reclaim the Flame’ plan that is focused on relentlessly pursuing a better experience for our guests. We are going to rapidly remodel these restaurants over the next five years or so and put them back into the hands of motivated, local franchisees to create amazing experiences for our guests." The transaction follows the brand's $400 million investment, announced in September 2022, to drive high-quality remodels, improve operations, enhance marketing and support ongoing technology and digital priorities. Burger King expects to accelerate Carrols' rate of remodels to bring the acquired portfolio to a modern image over the next five years. To accomplish this, Burger King plans to invest around $500 million, funded by Carrols' operating cash flow, to remodel 600 acquired restaurants that are not currently considered modern image. Deborah Derby, president and CEO of Carrols, commented: "Today's announcement is a testament to our more than 24,000 Carrols team members who have helped drive the company to record levels of profitability over the past 12 months. These results have allowed us, through this transaction, to deliver immediate and certain value to Carrols shareholders at an attractive premium to the company's current and historical share prices.” She continued: “Additionally, we believe our team members will now have additional opportunities as part of the greater RBI family – in our office, in the field and especially in our restaurants, including for long-time managers who may want to become franchisees themselves. We look forward to working closely with Tom and the rest of the Burger King team in the months and years ahead." Josh Kobza, CEO of RBI, added: "This is a terrific example of our commitment to put our capital to work to accelerate growth and support Tom and his team in their broader efforts to have a more competitive Burger King restaurant base. The strategic merits of this acquisition are very compelling and consistent with our objective to invest our capital in long-term, high-return opportunities." The transaction is expected to be completed in Q2 2024 and is subject to customary closing conditions.


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