Texas-based fast-food franchisee Houston Foods Inc plans to buy about 260 Burger King locations owned by Blackstone Group LP (BX)'s Heartland Food Corp in the Midwest, according to a Bloomberg report.
Texas-based fast-food franchisee Houston Foods Inc plans to buy about 260 Burger King locations owned by Blackstone Group LP (BX)’s Heartland Food Corp in the Midwest, according to a Bloomberg report.
Blackstone, which acquired Heartland through its GSO Capital Partners LP unit, has agreed to sell the restaurants for less than $100 million. Blackstone bought GSO, a credit manager run by Bennett Goodman, in 2008.
Heartland, based in Downers Grove, Illinois, owns about 330 Burger King locations in eight Midwestern states. Last month, Carrols Restaurant Group Inc, the largest Burger King franchisee, said it was buying 64 of Heartland’s restaurants in Tennessee, Indiana and Illinois for about $18 million. Heartland has reported annual sales of more than $420 million, according to a Bloomberg report.
Blackstone, a New York-based private-equity firm, is using the deals to cut its exposure to an increasingly sluggish fast-food industry. Restaurant chains have struggled with slow sales in North America, hurt by fierce competition and a fast-food price war.
More than 99 per cent of Burger King restaurants are owned by franchisees, and it’s not uncommon for them to change hands. In Heartland’s case, the company has been evaluating its portfolio, said Miguel Piedra, a spokesman for Miami-based Burger King Worldwide Inc.
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