Carrols stock jumps 15% on a ‘very compelling’ deal with Restaurant Brands

Carrols Restaurant Group Inc (NASDAQ: TAST) is up nearly 15% this morning after Restaurant Brands International Inc (NYSE: QSR) said it will acquire the largest Burger King franchisee for about $1.0 billion.

Carrols stock valued at $9.55

The all-cash agreement values each share of Carrols Restaurant Group at $9.55.

Restaurant Brands plans on financing the acquisition with cash on hand – and will “accelerate Carrols’ current rate of remodels” investing about $500 million to “remodel 600 acquired restaurants”, as per the press release on Tuesday.

The news arrives about a month before RBI is scheduled to report its Q4 financial results. Consensus is for it to earn 74 cents a share this quarter versus 72 cents per share a year ago.

Carrols stock is now up a whopping 80% versus its low in mid-October.

RBI chief executive’s view on Carrols deal

Restaurant Brands International expects its deal with Carrols to be neutral to per-share earnings (adjusted). The related benefit to its net leverage is also anticipated to be minimal.

The fast food holding company expects this transaction to close in the second quarter of 2024 provided that it satisfies the customary closing conditions including shareholders’ approval. Josh Kobza – the chief executive of RBI said in a press today:

Wall Street currently has a consensus “buy” rating on Carrols stock. The Nasdaq-listed firm operates more than 1,000 Burger King locations and about 60 of Popeyes restaurants.