Round and round we go. As the most recent wave of retailer privatizations continues, one of the first companies bought out — Burger King Holdings, Inc. — is taking the next step in becoming public again. Private equity investors Texas Pacific Group, Bain Capital Partners and Goldman Sachs Funds are planning a second offering for the world's second largest hamburger chain.
The firms bought Burger King from London-based Diageo PLC in 2002 for $2.26 billion, when its same-store sales and operating profits were down. The firms currently own 101 million shares of the company's common stock. They are offering an initial sell-off of 20 million shares, which will leave them with approximately 60.2 percent of Burger King's stock. The firms previously sold off an initial 20 percent of the stock in March of 2006.
“This is part of the normal pattern for private equity investors — they typically want to monetize their investment over a three- to five-year period,” says Craig Johnson, president of New Canaan, Conn.-based research firm Customer Growth Partners. Johnson notes that with valuations rising on Wall Street again, it is an opportune time for a public offering.