Restaurant Brands plans new term loan debt for Carrols purchase

By Sara Rosenberg

New York, Jan. 16 – Restaurant Brands International Inc. has received a commitment for new term loan debt to help fund its acquisition of Carrols Restaurant Group Inc., according to an 8-K filed with the Securities and Exchange Commission on Tuesday.

The company anticipates it will use about $750 million of debt for the transaction and about $200 million of cash on hand.

Under the agreement, Restaurant Brands will acquire all of Carrols issued and outstanding shares that are not already held by Restaurant Brands or its affiliates for $9.55 per share in an all-cash transaction. This implies a total enterprise value of about $1 billion. Restaurant Brands and its affiliates currently hold about 15% of Carrols’ outstanding equity.

There is a 30-day “go shop” period.

Closing is expected in the second quarter, subject to customary conditions, including the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and Carrols stockholder approval.

Net leverage giving effect to the transaction will increase minimally and the company will remain on track to reach its previously stated net leverage target of mid-4x by the end of 2024.

J.P. Morgan acted as financial adviser to Restaurant Brands.

Restaurant Brands is a Toronto-based quick service restaurant company. Carrols is a Syracuse, N.Y.-based franchisee of Burger King and Popeyes restaurants.

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