InterGlobe group in talks to acquire Burger King’s India franchise

INDIA – InterGlobe group, an India-based diversified conglomerate is in advanced talks to acquire Burger King India franchise from private equity firm Everstone Capital in a transaction valued at US$204 million (Rs 1,400 crore).

According to an ET Retail report which mentioned people familiar with the matter, rival suitors including two US-based buyout firms and a local private equity fund have since backed out of the deal due to a steep price.

Negotiations with Rahul Bhatia-controlled InterGlobe are said to be at the final stage though may not necessarily lead to a deal, notes the report.

Burger King which made sales of US$54.71 million (Rs 375 crore) in the year 2018 is said to be making losses at a consolidated level.

The restaurant chain which operates about 140 outlets in India is said to ahead of rival Starbucks in terms of sales.

Under Bhatia, InterGlobe operates a diversified poll of businesses including hospitality, IT services, luxury goods and travel booking.

The hotel business, which is a joint venture with the Accor group, operates Novotel, Pullman and the popular Ibis brand which runs 19 properties across India with an inventory of over 3,500 rooms.

Singapore-based Everstone Capital which owns QSR Asia Pte, a holding company for its restaurant investments in the region invested in setting up the Burger King franchise in India about five years ago.

It also runs some of the US-based fast-food chain’s restaurants in Indonesia.

Last year, Everstone unveiled plans to sell 20% of its stake in the quick service restaurant chain through the advisory of the accounting firm EY.

By that time, Everstone held about 88% of Burger King India, while the parent Burger King Worldwide held 12% stake in the restaurant.

In the year 2017, Burger King India grew 68% to post sales of US$33.27 million, generating average sales of US$379,133.73 from each of its 88 outlets opened till March 2017.

During the period, a close rival Jubilant FoodWorks posted average sales per outlet at US$294,881.79 from both brands, Domino’s Pizza and Dunkin’ Donuts.