Restaurant Brands International (RBI) announced today two significant transactions in China: the acquisition of Popeyes China and a co-investment with Cartesian Capital into TH International Limited (“Tims China”) (NASDAQ: THCH). These moves reflect RBI’s confidence in China as a major market for quick-service restaurants (QSR) and its commitment to driving growth in the region. The total capital outlay for these transactions will be up to $45 million.
RBI will acquire the Popeyes China business from Tims China on a cash-free, debt-free basis, based on an enterprise value of $15 million. Following this transaction, RBI will own and operate Popeyes China, which opened its first restaurant in August 2023 and currently has 14 locations in Shanghai. The company plans to accelerate restaurant growth through investments in local teams and development. Long-term, RBI aims to bring on local partners to establish a master franchisee model, similar to other international Popeyes markets.
To support the growth of Tims China, Cartesian Capital and RBI have agreed to invest up to $50 million in Tims China through three-year convertible notes. Of this amount, $40 million will be issued at closing, with the remaining funds provided over the next seven months, subject to certain operational and financial conditions. Specifically, $20 million will be issued to Cartesian, and up to $30 million will be issued to RBI, including $20 million at the closing. As a result of this investment, RBI will have the right to appoint two directors to the Tims China Board and will see its equity ownership in the business increase to up to 18%, on an as-converted basis. The RBI team will continue to collaborate closely with the Tims China management team and Board to drive growth in one of the world’s fastest-growing coffee markets.
“China presents one of the most compelling long-term market opportunities for both our Popeyes and Tim Hortons brands. Popeyes China has had a strong start, and we are excited to unlock its development potential in one of the largest chicken QSR markets globally. Today’s announcement enables Tims China to refocus on quality restaurant development and offering Chinese consumers our high-quality Tims coffee and food,” said Rafael Odorizzi, President of Asia Pacific.
These transactions follow the recent appointment of Patrick Siewert as Senior Advisor for Asia-Pacific and underscore RBI’s commitment to growth in the region.
