Burger King

"Cristiane Correa, Dream Big: How the Brazilian Trio behind 3G Capital —Jorge Paulo Lemann, Marcel Telles, and Beto Sicupira —Acquired Anheuser-Busch, Burger King and Heinz, (Rio de Janeiro: Sextante,"

"And as if that were not enough, competition is intensifying. New players in fast food are making an appearance in the market. Nineteen seventy-two marks the strong arrival of the “empire” McDonald’s in Quebec. Six years later, about fifty establishments will be set up there. In 1973, it was ten Mikes Submarines restaurants that made their home in the beautiful province. In the United States, where spending on food away from home exploded between 1960 and 1972, increasing by 103%, the growth of fast food is showing signs of slowing down. Canada and Quebec thus appear as a Klondike for American chains in search of new markets: Pizza Hut, Kentucky Fried Chicken, and Burger King are also preparing to cross the border. Although indirect, this imminent competition threatens to shake the foundations—and the plates!—of St-Hubert Bar-B-Q. It’s fair play, but a counterattack is becoming urgent."

"The trio’s timeline 1971: Jorge Paulo Lemann buys the Garantia broker dealer in Rio, with financing from private individuals 1976: Garantia earns a banking license with the Brazilian Central Bank 1982: Garantia partners acquire a controlling stake in Lojas Americanas, a retailer. Beto becomes its CEO 1989: Garantia partners acquire a controlling stake in Cervejaria Brahma, a beer brewing company. Marcel becomes its CEO 1998: Banco Garantia is sold to Credit Suisse First Boston. Most of its executives won’t work with the trio anymore on a full-time basis (although many remain co-investors in many of their deals) 1999: Brahma merges with (i.e., buys) Cervejaria Antartica, forming Ambev, Brazil’s largest beer brewing company 2004: The trio enters an agreement with Belgian giant Interbrew’s controlling shareholders where the two groups become controlling shareholders of Inbev, the resulting company 2008: Inbev buys Anheuser-Busch, America’s most iconic brewery, on the brink of the subprime mortgage crisis, forming Anheuser-Busch Inbev, AB Inbev, for short 2010: 3G Capital, the trio’s private equity firm, does its largest deal to date, buying Burger King from another private equity fund…"

"In a recent case of a top performer leaving Burger King, the employee was amazed at how much people tried to dissuade him from leaving once he announced his decision. He had only recently been put into a “Future Promises” list of high potential employees that were expected to take leadership positions within the company in the near future (and didn’t even know it)."

"The first large bet was made in conjunction with TCI, a London-based asset manager led by Chris Hohn and known for a number of activist incursions, namely ABN Amro Bank and the Deutsche Borse. 3G and TCI both acquired a large stake in CSX, an American railroad company, and pressed for aggressive changes in the company’s management. They were partially backed by Behring’s experience in ALL, Brazil’s largest railroad operator. After CSX, 3G raised a new fund enabling it to announce the take-private of Burger King in 2010. The fast-food chain was then held by private equity funds run by the Texas Pacific Group, Bain Capital, and Goldman Sachs, who’d purchased the company from Diageo in 2002. The group was having trouble running it, especially after the 2008 recession. The buyout valued BK at $3.3 billion (plus $700 million in debts), or nine times earnings. The disbursement was levered roughly one-to-one, which added around $1.7 billion of takeover debt on top of the existing $700 million. Bernardo Hees,"

"for Harrison. Bob knew that Carleton County potato farmers were shipping a lot of potatoes to the Birds Eye plant in Maine that processed them into frozen french fries. He felt that there was something promising there, something worth exploring, and he was right. Fast food restaurants with french fries as a central focus were slowly making their pres- ence felt. McDonald’s, Burger King, A&W, Kentucky Fried Chicken all appeared in the mid-1950s in the United States, and the list has kept growing ever since, as did their demands for french fries. Fast food outlets had arrived to stay and they were grabbing a large share of the restaurant food market.25 Bob suggested to Harrison that the time was ripe for a home-grown"

"America’s first franchise motel company, Holiday Inn, was founded in the early 1950s by Memphis home builder Kemmons Wil¬ son with much the same promise. You never wrote home about the accommodations, but every Holiday Inn met certain standards of cleanliness and service, regardless of its location. Pull in with your weary family after a day of dusty driving, and you knew just what to expect. I call this type of consumer promise consistent mediocrity. Don’t un¬ derestimate its power, especially at lower price points. Howard John¬ son restaurants and Holiday Inn motels had the same underlying appeal that food giants such as McDonald’s, Burger King, and Wendy’s have. Are you passionately drawn to the sandwich you order at Wendy’s, or are you more interested in its competitive price, con¬ sistency, and convenience? McDonald’s rarely comes out on top in newspaper surveys of the best burgers in town. America’s quick-serve burger franchises, now doing successful business around the world, are really in the frozen food distribution business. They specialize in serving customers a protein fix in environments of little excitement or delight. But a Quarter Pounder with cheese tastes the same in Bal¬ timore or Beijing. And McDonald’s bathrooms are clean all over the planet—no small feat!"

"reviving a run-down department store not only requires skill and dexterity but also luck in a multiplied form. Anyone who dares to take on such a company must know the upcoming trends and the buying behavior of customers. No American department store chain has been able to gain a permanent foothold in Germany. Woolworth had to close its doors, America's leading supermarket giant Walmart has failed in this country, and the English fashion chain Marks & Spencer was also unable to prevail. In contrast, there is again the global success of brands like Foster Grant, Schweppes, or Burger King. Buying these is part of the success strategy of the Berggruen-Franklin duo."

"Companies that produce something were purchased: sunglasses and reading glasses, cookies, or cornflakes. He acquired media conglomerates that, as he puts it, "produce money." At the fast food chain Burger King, the patties are a reliable source of revenue."