The CEO of Restaurant Brands International Inc., a restaurant chain conglomerate that owns Tim Hortons, will vacate the role and assume a new position that frees him up to focus on potential future acquisitions, among other things.
Daniel Schwartz, who served as RBI’s chief executive since the company formed in 2014, will become executive chairman and co-chairman of the board of directors effective immediately, the company announced Wednesday.
“It allows (Schwartz) to focus even more on his particular strengths, including capital allocation and key strategic decisions, such as the assessment of potential M&A opportunities,” said the company’s new chief executive Jose Cil during a conference call with analysts. Cil served as Burger King’s president since 2014, but has worked with the company for 18 years.
The company formed out of a merger of Tim Hortons and Burger King, which at the time was headed by Schwartz. In 2017, RBI announced a US$1.8-billion deal to acquire Popeyes Louisiana Kitchen Inc.
It’s been focused on growing the three chains internationally and that will remain a top priority for Cil in his new role. However, analysts have expected more acquisitions from RBI in the future and speculation circulates the company may be eyeing a pizzeria chain as its next target.
“While we are primarily focused on growing our three brands organically today, we do aspire to do more and maybe someday we will,” said Schwartz in an interview.
He did not comment specifically when asked about rumours RBI would approach Papa John’s Pizza. The pizza chain boasts more than 5,000 locations in 44 countries and territories, including Canada. Schwartz reiterated the primary focus remains on growing the existing brands, but the company may be opportunistic again in the future.
Shares of both companies rose throughout the day. RBI shares jumped $7.03 or 9.23 per cent to $83.20 in afternoon trading on the TSX, while Papa John’s Intl. shares rose nearly seven per cent or US$2.90 to US$44.53 on the Nasdaq.
When looking at acquisitions, Schwartz said during the investor call that RBI focuses on iconic brands it can grow significantly in the long run, like it’s been doing with its current roster of chains.
The company has been working to rapidly expand Tim Hortons beyond its Canadian roots. It signed a master franchise joint venture agreement with a private equity firm last year to open more than 1,500 of the coffee-and-doughnut shops in China — home to a burgeoning coffee culture and a hotbed of international coffee chain expansions.
Cil declined to address the recent heightened tensions between China and Canada following Canada’s arrest of Meng Wanzhou, a Chinese national and chief financial officer of Huawei, at the Americans behest, during an interview and whether that’s changed RBI’s plans in the country.
“The first priority is to open the first one,” he said, saying the team is working on doing that as quickly as possible.
Tim Hortons also recently expanded into the Philippines, the United Kingdom and Spain.
The CEO shake up was one several executive suite changes the company made. The company’s former chief technology and development officer, Josh Kobza, has been named chief operating officer also effective immediately.
RBI also released two key retail metrics from its fourth quarter ahead of the full results to show “continued growth and performance.”
Comparable sales at Tim Hortons for the three months ending Dec. 31 rose 1.9 per cent, while it advanced 1.7 per cent at Burger King and 0.1 per cent at Popeyes.
The number of net new stores grew 2.1 per cent for Tim Hortons, 6.1 per cent for Burger King and 7.3 per cent for Popeyes.
In the slew of announcements, RBI also raised its dividend to 50 cents per share, up from 45 cents, and said it would host its first investor day conference in New York City this May.
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Companies in this story: (TSX:QSR)
Aleksandra Sagan, The Canadian Press