SHANGHAI, China - TH International Limited, known as Tims China (NASDAQ:THCH), the exclusive operator of Tim Hortons coffee shops in China, has announced securing up to $65 million in financing from its founding shareholders, Cartesian Capital Group, LLC, and Restaurant Brands International Inc. (NYSE:QSR).
The financing includes $50 million in convertible notes, with $40 million already issued and the remainder expected over the next seven months, contingent on certain conditions.
The three-year convertible notes are set to transform into convertible preferred shares of Tims China, which will then convert to ordinary shares at a premium to the recent volume-weighted average price (VWAP).
Moreover, Restaurant Brands International has acquired the Popeyes China business from Tims China for an enterprise value of $15 million, while Tims China has simultaneously settled the deferred consideration owed to former Popeyes China shareholders with a $15 million convertible note.
Yongchen Lu, CEO of Tims China, expressed confidence in the deal, stating that the funding package is a testament to the shareholders' commitment and a significant step towards ensuring the company's long-term success in the competitive Chinese market. The CEO highlighted the importance of this year for the company and the strategic focus on the core Tim Hortons brand.
Details of these financial transactions will be disclosed in a 6-K filing with the SEC, available on the SEC's website by July 1, 2024.
Tims China, which operates Tim Hortons coffee shops across mainland China, Hong Kong, and Macau, was established by Cartesian Capital Group and Tim Hortons Restaurants International, a subsidiary of Restaurant Brands International. The company emphasizes the importance of local relevance, innovation, community engagement, and convenience.
This announcement is based on a press release statement and is intended for informational purposes. It includes forward-looking statements subject to risks, uncertainties, and other factors that could affect the actual results, including the risk of unmet conditions for additional funding and the competitive and economic environment in China.
In other recent news, Restaurant Brands International has been making significant strides in the market. The company's earnings and revenue results reveal an optimistic outlook, with Goldman Sachs and UBS maintaining a Buy rating on the company's shares. Both firms' earnings projections for the company align with the Factset consensus, estimating $3.83 earnings per share and $3.1 billion in EBITDA for the year 2025.
In a notable development, Restaurant Brands has finalized its acquisition of Carrols Restaurant Group (NASDAQ:TAST), the largest Burger King franchisee in the U.S., for approximately $1 billion. This move is part of the company's "Reclaim the Flame" plan, which includes a $500 million investment to reimagine over 600 Carrols restaurants.
Analysts have given positive feedback on the company's performance. TD Cowen reaffirmed its Buy rating, emphasizing Burger King's strategic approach. Deutsche Bank increased its price target from $87.00 to $90.00, following strong Q1 sales. KeyBanc Capital Markets also increased its price target to $85, maintaining an Overweight rating.
In a bid to stay competitive in the fast-food market, Burger King, part of Restaurant Brands International, has announced the launch of a new $5 value meal deal. This strategic move places the fast-food chain ahead of its competitor McDonald's (NYSE:MCD) in offering a budget-friendly dining option. These are the recent developments for Restaurant Brands International.
InvestingPro Insights
As Tims China secures significant financing from its founding shareholders, including Restaurant Brands International Inc. (NYSE:QSR), it's worth noting the financial health and market position of QSR itself. According to InvestingPro data, QSR has a market capitalization of $22.26 billion, reflecting its substantial size in the industry.
The company's Price to Earnings (P/E) ratio stands at 17.87, which, when adjusted for the last twelve months as of Q1 2024, slightly decreases to 17.44. This P/E ratio indicates that QSR is trading at a valuation that is relatively low compared to its near-term earnings growth, suggesting potential for investment value.
In the same period, QSR has demonstrated a solid revenue growth of 7.93%, underlining its ability to expand its financial top-line in a competitive market. Moreover, the company boasts a high Price to Book (P/B) ratio of 7.5, which may reflect the market's confidence in QSR's assets and growth prospects, albeit also signaling a relatively high valuation of the company's net assets.
InvestingPro Tips highlight that QSR has raised its dividend for 9 consecutive years and has maintained dividend payments for 10 consecutive years, with a dividend yield of 3.3% as of mid-2024. This track record is indicative of QSR's commitment to returning value to shareholders and may appeal to income-focused investors.
For readers interested in a deeper dive into QSR's financial metrics and strategic positioning, InvestingPro offers additional insights and tips. There are 7 more InvestingPro Tips available for QSR, which can be accessed through the dedicated page: https://www.investing.com/pro/QSR.
To enhance your investment analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. These insights could be particularly valuable given the evolving dynamics of the global restaurant industry and QSR's role within it.
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