Restaurant Brands International Inc. and Firehouse Restaurant Group Inc. announced that they have reached an agreement for RBI to acquire Firehouse Subs for $1.0 billion in an all-cash transaction. The transaction offers significant long-term unit growth potential to drive attractive returns for all stakeholders and is expected to be immediately accretive to RBI's diluted net earnings per share.
Firehouse Subs adds a strong and loved restaurant brand with attractive unit economics in a complementary category to RBI's existing family of iconic quick service restaurant ("QSR") brands, Tim Hortons, Burger King, and Popeyes.
Founded in Jacksonville, Florida in 1994 by brothers and former firefighters Chris Sorensen and Robin Sorensen, Firehouse Subs is a brand built on decades of culture rooted in public service, creating hot and hearty subs piled high with the highest quality meats and cheeses and a commitment to saving lives through the establishment of the non-profit Firehouse Subs Public Safety Foundation.
The brand is a strong and growing player within the $30 billion U.S. QSR sandwich category and since 2010 has increased its number of restaurants 3x to ~1,200 and its system-wide sales 4x to an expected approximately $1.1 billion for 2021. This momentum extends into 2021, with October year to date U.S. comparable sales versus 2019 of 20 percent. The brand benefits from a strong family of franchisees who own and operate 97 percent of the brand's restaurants across 46 U.S. States, Canada and Puerto Rico. Firehouse Subs is expected to generate roughly $50 million of 2021E Adjusted EBITDA3.
José Cil, chief executive officer of RBI commented, "Firehouse Subs is a special brand with a talented team, impressive culture and community focus that resonates with guests and closely aligns with our core values at RBI. We see tremendous potential to accelerate U.S. and international growth at Firehouse Subs with RBI's development expertise, global franchisee network and digital capabilities. We are excited to welcome the Firehouse Subs team to the RBI family and to continue our ambitious dream of building the world's most loved restaurant brands.
Don Fox, chief executive officer of Firehouse Subs said, "At Firehouse Subs we are united in our commitment to and passion for hearty and flavorful food, heartfelt service, and public safety. Joining the RBI family of brands provides an energizing opportunity to assist more communities, not only across America and Canada, but around the globe. The donations we generate for our Foundation through our restaurants means changing and saving lives, so we can't wait to accelerate our journey at home and around the world."