Burger King, Vinci Partners Interested in Purchase of Outback Brazil, Says Newspaper

RIO DE JANEIRO, BRAZIL – Manager Vinci Partners and fast-food chain Burger King have joined the race to purchase the Brazilian operations of Outback, an American restaurant chain inspired by Australian cuisine. The information is from sources in the newspaper Valor Econômico. According to Valor, the negotiations are still in their early stages.

It is worth noting that in December 2019 Bloomin’ Brands, the brand controlling the Outback network, hired Bank of America Securities (BofA) to search for potentially interested parties and explore strategic options for the brand. At the time, the International Meal Company (IMC), owner of Roast Chicken and Vienna, voiced its interest.

According to the newspaper, Bloomin’ Brands would not accept an exchange of shares and intends to be paid the purchase price in cash.

In a note to InfoMoney, the controlling company of the Outback network confirmed that it had hired BofA to assist in the search for parties interested in the brand, but did not provide details on the companies that are requesting the acquisition.

“We reiterate that on November 6th, 2019, Bloomin’ Brands’ CEO David Deno announced that he had hired BofA Securities, Inc. to analyze several possibilities, strategic options, and alternatives to generate even greater value for the group’s brand shares globally,” the company said in a note.

The company further reiterates the relevance of the Outback operation in the country and provided details on future expansion plans for this year.

“Bloomin’ Brands reports that it strategically assesses each of the suggestions with the goal of maximizing returns for its shareholders. The Company reiterates the significance of its operation in Brazil and reports that the local expansion plan of its brands is now confirmed, with significant growth of some 12 percent in the number of shops in 2020,” it concludes.

Today, the Outback holds 100 shops spread throughout Brazil. Regardless of who takes the deal, it will also have to keep Abbraccio, an Italian food restaurant with 12 sale points in the country and a Fleming’s unit. Both operations are much smaller than the Outback.

According to Valor, Restaurant Brands International (RBI), BK Brazil’s controlling network, has already given the go-ahead for the negotiation and the first contacts between the companies took place through local representatives.

Vinci Partners, on the other hand, despite its 7.7 percent minority stake in BK Brasil, may have enough resources to purchase the operation.

According to the company’s website, the private equity fund VCP III, which holds Domino’s, an American pizzeria network in its portfolio, has R$2.8 (US$0.7) billion free for investment in the Brazilian economy and is a fund that holds more than 30 percent of its capital in the food, health and telecommunications sectors.

Sought for comment by InfoMoney, Vinci Partners said it is not commenting on the matter for the time being. Similarly, Burger King has not commented.

Bloomin’ Brands’ total brands in Brazil yielded approximately R$1.4 billion (US$350 million) in revenue in 2018. The Brazilian operation of Outback has a growth above the world average, but the margins are pressured by high operating costs.