Private Equity Firm 3G Buys Burger King
The fast food business got a whopper of a deal in 2010. In late summer, Brazilian private equity firm 3G paid $3.3 billion to acquire the fast food staple Burger King. In part, the acquisition is another sign that the burger business is sizzling. Such upstart chains as Five Guys and Fatburger are expanding rapidly. Even some high-end chefs and restaurateurs are opening burger joints. What's more, Burger King was the second big burger deal of the year. In February, private equity firm Apollo paid nearly $700 million for CKE Restaurants, which owns BK rivals Carl's Jr. and Hardee's. Despite the hunger for burgers, BK has struggled, reporting declining sales for more than a year. A few years ago, BK's management decided to refocus the chain on its loyal 18-to-34 year-old customers. But that age group has had among the highest rates of job loss during the recession. BK's new owners say they will get growth outside the U.S. Burger King still generates two-thirds of its revenue from the U.S. and Canada. The more diversified McDonald's generates just 35% of its sales in the U.S.