May 6, 2024
3G Capital’s buyout of Burger King may be the
most successful private equity deal you’ve never heard about. Over
the last fourteen years, or the length of a typical private equity
fund, 3G turned a $1 billion investment into $28 billion in value.
The annual dividends from the investment accruing to 3G today are
around 70% of its invested capital. The deal is one of the highest
earning buyouts ever.
3G is an organization with a storied history. Founded by Jorge
Paolo Lemann, Carlos Alberto Sicupira, and Marcel Herrmann Telles,
the group created an owner-operator model of investing. They rose
to prominence through building the largest beer company in the
world, initially buying local brewer Brahma in 1989, expanding it
and merging with a competitor to become AmBev in 1999, merging with
Interbrew to become ImBev in 2004, and taking over Anheuser Busch
in 2008 to become AB InBev.
Twenty years ago, Alex Behring, a young star on their team, moved
to the US to form 3G Capital and take the approach abroad.
Burger King was the second largest hamburger fast food chain after
McDonalds in 2010 when 3G took it private. What it accomplished
since then has been extraordinary.
My guests to discuss 3G and the deal are Alex Behring and Daniel
Schwartz. Co-Managing Partners of 3G Capital.
Our conversation covers the history of 3G, Alex's journey to form
3G Capital, and the 3G playbook. We then dive into the deal,
covering the sourcing and deal dynamics, improving operations,
growing the business, taking the company public unexpectedly, and
reloading to buy Tim Horton’s, Popeye’s, and Firehouse Subs.
Today’s Burger King is part of Restaurant Brands International
(QSR), a public company with a $32 billion market cap and $50
billion enterprise value.
This classic deal will widen your aperture on what’s possible with
a long-term, compounding holding period and operational
excellence.
Learn More
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