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Burger King parent Restaurant Brands International announced Monday it bought Firehouse Subs for $1 billion.
Shares of the restaurant conglomerate rose 2% in premarket trading on the news. The stock has fallen 4% this year, giving it a market value of $27.1 billion.
The sandwich chain is now the fourth brand in Restaurant Brands’ portfolio, which also includes Popeyes Louisiana Kitchen and Tim Hortons. The restaurant company has long been rumored to be on the hunt for another fast-food chain, although reviving Tim Hortons and accelerating Popeyes’ growth has kept it busy.
“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,” Restaurant Brands CEO Jose Cil said in statement.
Firehouse Subs was founded in 1994 by brothers and former firefighters Chris and Robin Sorensen. The chain has roughly 1,200 locations across the U.S. and expects $1.1 billion in system-wide sales for 2021. For the first 10 months of the year, its same-store sales climbed 20% compared with the same time two years ago.
Like Restaurant Brands’ other chains, the majority of Firehouse Subs’ locations are operated by franchisees.
Restaurant Brands said it would fund the all-cash deal through a combination of debt and using the cash it has on hand. After the transaction closes, Firehouse’s headquarters will remain in Jacksonville, Florida, and its CEO Don Fox and CFO Vincent Burchianti are expected to stay.