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Fast food chain Burger King has announced its plans to go public through a deal with a London-listed investment firm, less than two years after it agreed to be taken private by private equity group 3G Capital Management LLC.
This remarkably quick sale highlights a profit improvement at Burger King' Worldwide Holdings Inc, which operates more than 12,000 mainly franchise fast-food outlets around the world.
The chain is currently improving its menu in an attempt to compete with the likes of Wendy's co after the hamburger chain knocked Burger King from its spot as the second-largest U.S. hamburger chain in 2011. Burger King, known for its Whopper hamburgers, is revamping its menu with items like salads and smoothies as it fights to win back diners.
Its new investor Justice Holdings said it expects the fast food chain's core profits in 2012 to be almost double those in 2010. Justice Holdings will merge with Burger King and pay about $1.4 billion in cash for a 29 percent stake in the new company, while 3G Capital will retain a 71 percent stake in the company.
Burger King's Chief Financial Officer, Daniel Schwartz stated the deal with Justice valued Burger King at an enterprise value of $8 billion, double its valuation when it was acquired by 3G Capital in October 2010.
Schwartz said in an interview, "3G still believes it is in the very early innings of what is going to be a very long-term investment in Burger King."
"It's the right time for Burger King to be public in the U.S. again. Our new investor base will help us maximize the brand's future potential going forward," he added.
The combined revenues of Wendy's and Burger King came to just under $5 billion last year, while total revenue at McDonald's rose 12 percent to $27 billon, according to earnings statements from the companies.
For the latest reports on Burger King, see details: Burger King market reports
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