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  • Everstone Capital Sells $57M Stake in Burger King’s India, Indonesia Franchisee, Ajanta Pharma Founders to Invest

    Everstone Capital Sells $57M Stake in Burger King’s India, Indonesia Franchisee, Ajanta Pharma Founders to Invest

    Private equity firm Everstone is set to sell its entire stake, amounting to 11.26 per cent, in Restaurant Brands Asia, a franchisee operating in India and Indonesia for fast-food giant Burger King. Those familiar with the matter have confirmed that the deal will be announced soon.

    Equity Stake Valuation

    Everstone Capital’s stake, held via its investment arm QSR Asia Pte Ltd, is presently valued at USD 57 million, based on Refinitiv data. Meanwhile, the market capitalisation of Restaurant Brands Asia stands at USD 437 million in Mumbai.

    New Strategic Investor

    As part of the agreement, a new strategic investor will be introduced to Restaurant Brands Asia. The identity of this investor remains confidential at this point.

    Despite repeated attempts, both Everstone and Restaurant Brands Asia have opted to not comment on the matter.

    Pharma Founders as Potential Investors

    The family office of the founding members of Ajanta Pharma, an Indian pharmaceutical company, is reportedly taking a keen interest in this deal. The family office, which also operates in the restaurant business, is projected to invest up to INR 8 billion (equivalent to USD 88 million) into the company.

    No comment could be obtained from the representatives of the family office either.

    Although it’s unclear what percentage of the company Ajanta would acquire, it’s speculated that they may become the majority stakeholder over time as other shareholders divest their stakes.

    In a recent communication with Indian stock exchanges, Restaurant Brands Asia announced upcoming board meeting plans to discuss and evaluate possible fundraising options, although no further information was provided.

    Questions & Answers

    What is the current stake of Everstone in Restaurant Brands Asia?
    Everstone presently holds an 11.26 per cent stake in Restaurant Brands Asia.

    Who is speculated to be the new strategic investor?
    The family office of the founders of Ajanta Pharma is speculated to be the new strategic investor.

    How much is the family office of Ajanta Pharma expected to invest?
    They are expected to invest up to INR 8 billion (USD 88 million) into the company.

  • Everstone explores stake sale in Restaurant Brands Asia

    Everstone explores stake sale in Restaurant Brands Asia

    Private equity firm Everstone Capital is considering selling its stake worth $314 million in Restaurant Brands Asia Ltd, the master franchisee of Burger King in India and Indonesia, two sources with knowledge of the matter told Reuters.

    The Singapore-headquartered buyout firm is in talks with one adviser to explore the sale, the sources said, declining to be identified as the matter is private.

    Everstone Capital, through its investment vehicle QSR Asia Pte Ltd holds a 40.9 per cent stake in Restaurant Brands, according to Refinitiv data.

    Everstone Capital declined to comment and Restaurant Brands Asia did not respond to Reuters queries seeking comment.

    Restaurant Brands Asia had a market value of $768 million based on Friday’s price of 129 Indian rupees. Its shares have jumped 49 per cent from a record low struck in mid-May.

    The potential sale comes at a time when consumer spending is rebounding following the easing of coronavirus restrictions in India and Indonesia, which have helped boost their second-quarter economic growth to their fastest pace in a year.

    India’s economy grew 13.5 per cent on-year in April-June, while Indonesia’s expanded 5.44 per cent.

    Restaurant Brands Asia, formerly known as Burger King India Ltd, was incorporated in 2013 following a partnership formed between Everstone and Burger King Worldwide Inc to develop the fast-food chain’s presence in India.

    Everstone Capital is the private equity arm of Everstone Group, which manages over $7 billion in assets.

    The private equity firm focuses on the mid-market and invests in businesses focused on India and Southeast Asia.

    Mumbai-based Restaurant Brands Asia has since grown to operating 315 restaurants in the country as of end-March this year, according to its latest annual report.

    Restaurant Brands Asia holds Burger King’s exclusive national master franchisee in India and Indonesia, where it also owns and operates 177 restaurants as of end-March, the annual report shows.

    Under the master franchisee agreement, Restaurant Brands Asia has agreed to develop and open at least 700 restaurants by the end of 2026 in India, according to the annual report.

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  • Everstone to sell Burger King India franchise

    Everstone to sell Burger King India franchise

    Singapore-based private equity firm Everstone plans to sell its Burger King India franchise.

    The firm is reportedly in advanced discussions with Rahul Bhatia-controlled InterGlobe group to sell the franchise a deal worth US$204 million.

    The fast-food chain operates 140 outlets, spread across cities in north, west and south India. Last year, its sales reached $54 million.

    Everstone has managed Burger King India since 2013, along with Coffee Bean & Tea Leaf, Copper Chimney, Bombay Blue and Noodle Bar in India.

    The discussions between the two parties come at a time when Bhatia is in dispute with Rakesh Gangwal over their flagship airline IndiGo.

  • Everstone puts on the block a piece of Burger King India

    Everstone puts on the block a piece of Burger King India

    Five years after setting up the franchise for Burger King in India, homegrown PE firm Everstone Capital is set to offload a minority stake in the quick service restaurant (QSR) chain. Everstone, which holds about 88% of Burger King India, will offload 20%, valuing the chain at $300-350 million, according to two people aware of the development.

    As per the proposed transaction, about 30-35% of Burger King India will be sold through secondary and primary offerings. Parent Burger King Worldwide holds 12% of Burger King India.

    Advisory firm EY has been mandated to run the sale process, which is expected to be launched in a few weeks, said one of the persons cited above. Everstone will remain the controlling stakeholder after the transaction.

    F&B Asia Ventures, a pan-Asian food and beverage business platform controlled by Everstone Capital, owns and operates Burger King’s branded restaurants in India and Indonesia. Everstone joined hands with US fast-food chain Burger King Worldwide in 2013 to set up the franchise for the two countries.

    Burger King India grew 68% to post sales of Rs 237 crore in FY17 from Rs 141 crore in FY16. In FY17, the company generated average sales of Rs 2.7 crore from each of its 88 outlets opened till March 2017, while rival Westlife Development, which runs McDonald’s in the south and west, posted average sales of Rs 3.6 crore from each outlet. Burger King, however, notched up higher numbers than Jubilant FoodWorksNSE -0.78 %, where average sales per outlet were at Rs 2.1 crore from both its brands, Dominos, Dunkin’ Donuts, ET reported last year.

    Since its first outlet was opened in November 2014, Burger King India has grown into 140 outlets in more than 30 cities in India and is expected to cross 200 by FY19. The chain is present in Amritsar, Ahmedabad, Bengaluru, Chandigarh, Chennai, Hyderabad, Kochi, Ludhiana, Mumbai, Delhi-National Capital Region and Pune.

    If the deal materialises, it will be Everstone’s second part exit from the food and beverages (F&B) portfolio in the past year. In December, Everstone sold a stake in Massive Restaurants, owned by Jiggs Kalra and son Zorawar Kalra, to PE firm Gaja Capital.

    Brands on its F&B Asia platform include Harry’s, Domino’s (Indonesia), Burger King, Pind Balluchi and Duck & Rice. The fund has invested over `1,200 crore in the sector so far. Besides F&B Asia, Everstone also owns Pan India Foods Solutions, a platform with brands such as Spaghetti Kitchen, Copper Chimney, Gelato Italiano, The Coffee Bean & Tea Leaf, Bombay Blue and Noodle Bar.

    “Investor interest in Indian QSR is driven by the same trends that are driving consumption theme across categories such as demographics, urbanisation and eating out,” said Harminder Sahni, managing director of retail consultancy firm, Wazir Advisors. Multinationals have the advantage of global brand equity and experience. Indian brands are too young to compete as of now and have to tackle issues such as product development, supply chain, store expansion and consumer connect, Sahni added.