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Alexandre Behring

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101

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2024-05-06

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2024-05-06

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1. “The other way we got the organization excited about the direction we were taking the company in is frankly through the equity ownership that we brought to the company, just like you did the railroad, we had this philosophy that for people who acted like owners and really held themselves accountable and cared, we wanted to make them owners in the business. And so we granted sizable stock options to top 150 people in the organization to become owners of the business. We also let folks who received proceeds as part of the Burger King take private transaction. We let them reinvest those proceeds into the company and we levered them. We gave them a multiple times matching. And the other piece that we did each year, we allowed the top couple few hundred people in the business to take a portion.”

   2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

2. “Francis became a big deal, but that's now 14 years to the making. But he had to spend a lot of money and attention and focus and actions. First to source the right master franchisee, then to make sure, organize that capitalization of that franchisee and help him with that, then local sourcing of ingredients, customization of menu, then slowly real estate, if you want to get quality locations that can be done overnight. a lot of actions that do create a lot of value, but on a longer horizon, same thing that I said about France, I could have said about China or Brazil. So I think the horizon was an important enabler of us to make some of the decisions that we made.”

   2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

3. “On the growth side, I think one interesting thing, I think, is this investment horizon difference that we have. Because, do I think we're any smarter than any of the prior owners, for example, of this business? There's no way. I mean, there's some of the smartest people that exist in this industry. That's not the case. I think we did have a very different time horizon. And then, for example, some of this expansion opportunities that Dan alluded to”

   2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

4. “Daniel's being humble about the zero-based budget that was done there. I mean, there were some real opportunities in the near term to increase a bit. There was a lot of money being spent away from the business, meaning on more bureaucratic corporate layers and things that really had little impact on sales and little impact on opening the restaurants. There were some meaningful dollars there.”

   2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

5. “You break down those two aspects of that initial goal setting. So the first is efficiencies and the second is growth. As you describe it, Sounds really simple. Put a bunch of goals in place that are tied to these financial metrics, and then it happens. What are the aspects of driving what seems like a very simple way of improving efficiencies and actually making that happen at the company?”

   2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

6. “I mean, when we bought the business in France, there were no Burger King restaurants in France. It's one of our competitors more profitable markets globally. But I think we crossed 2 billion in France.”

   2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

7. “What was so great about this business is that it was a mature business in the sense that it had a 50 year history, but there was so much opportunity to make it way, way bigger. And so after making the business more efficient, we really set our sights on how do we make this the fastest growing restaurant company globally. And we noticed in certain countries the brand was stronger than in other countries, depending on how we'd go to market. And we as a team and board developed a view that we should have large, well-capitalized, master franchised partners with great local operating expertise in some of the bigger markets. Then we set our sights on creating these partnerships around the world. And in the first couple years, we created partnerships in Brazil, in China, in France as an anecdote.”

   2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

8. “Set goals for the organization around the number of units that we'd want to open, the sales growth that we'd had, the capital returns that we'd have. And we posted those goals all around the organization to give everyone visibility on how we were doing. So behind people's desks, you'd see their goals for the year, red, yellow, and green metrics to create a lot of transparency and visibility within the organization of where it is that we were taking the business and how we were progressing. And then as Alex said, we felt that there was an opportunity to run the business more efficiently. And so as part of the zero-based budgeting effort, we kind of compartmentalized costs around the organization and made groups accountable for what it is that they were going to spend. We gave people budgets and we tried to benchmark inside and outside. And so if one group was spending X dollars a year on travel per person, then the other group should try to.”

   2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

9. “Had a new leadership team, which was a combination of folks from 3G. I joined as ZFO, one of our partners joined as CEO. We elevated a couple really good people within the company, brought in someone from the beer business that Alex mentioned earlier to help out in terms of people and reorganization. We set a bold, ambitious goal for the business of trying to be the best and the fastest growing restaurant company globally. We tried to create a more entrepreneurial atmosphere, right? We took down all of the offices, we took down the walls, and we created an open floor plan so everyone could have a more collaborative environment as part of setting this bold, ambitious goal. We copied a lot of what Alex did so successfully at the railroad company in terms of the management style to achieve a long-term bold ambitious goal. It happens one year at a time.”

   2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

10. “So once you have control over it, you now are going to start operating this company. What are those first steps that you took over the first, say, six months or year to bring in your people and start to make changes happen”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

11. “And it was around 12,000 stores operating in around 80 plus countries. But I think what was interesting about the time is that it wasn't growing all that much. I don't know, one and a half, it was growing a couple hundred units on a base of 12,000 and our competitors were growing a whole lot more. We paid around $4 billion and it was doing around $450 million or so of EBITDA, maybe $150, $175 million of trailing CapEx at the time. So high 200s, 300-ish of unlevered free cash flow. And that's what the business looked like at the time.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

12. “So we ended up in a very similar point where we started. We started at 24. But then the markets became very different and the leverage markets became very different and the equity markets corrected a lot. We went down on our offer, which is not the usual intuitive path. We're bidding against ourselves though. And then we went back up, but the stock was down. So, anyway, so it was a long convoluted volatile process that ended up in a similar place.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

13. “It's interesting, and one of the conversations you would have at that time after the great financial crisis was basically convincing the sellers in that case that you would have It's hard even to conceive of that today, but a $4 billion LBO in 2010 was by far the largest deal after the crisis. I needed a long road show. That was a long process. And also after the financial crisis, there were still significant volatility to markets and to stock prices, which further complicated matters.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

14. “I had a good relationship with one of the three private equity owners I called the managing partner there and he was a bit surprised but amenable to a conversation introduced me to the chairman and CEO at the time I traveled to Miami had lunch with him I think he was properly incentivized. He had to be in a position for many years, had done a good job because, I mean, the payback for everybody was happy. Then, of course, that meant he was also a meaningful equity holder at the business. So they were amenable on both sides, both management and the anchor shareholders were interested in the conversation.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

15. “You go to get ready to make a bid. A lot of times companies, you've got embedded constituents. So you do have the private equity owners who may want to be exiting, but you also have a management team who has their jobs. How did you decide how to go about the approach to make the bid for the company?”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

16. “One of the very reasonable pushbacks that we got as we discussed this in committee was the owners of this businesses were some really respectable private equity firms, ultra-successful ones, which had made a lot of money, by the way. So what was it that we saw that we wanted to pay, I think at the time an orph of 40% premium to market to take this thing private? What was it that we're thinking that we could accomplish that would justify that?”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

17. “True, and sometimes it's hard to differentiate that. And I think we're lucky that in this case our analysis helped us and Dan did great work on this and the team that was working on this deal to really give us comfort around the nature of the structural advantages of the business and the short-term nature of the issues.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

18. “Were centered around a dollar double cheeseburger sandwich that was a money loser for franchisees, which is one of the key things in this business is it's a great business to have a fully franchised brand, but it needs to be very good for everyone to be sustainable, meaning your franchisees making money is left right and center of this business. So this was a real problem. People were very disgruntled as a function of that. They were suing the company. I think what we were able to do is we're able to separate the short-term issues and the short-term noise associated with those issues from the fundamental promising long-term tenets of the business. I think that's one of the key things on investment analysis. Usually things are depressed, valuation of things is depressed for a reason. And again, that reason may or may not be structured.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

19. “It's probably worth also adding a couple things. One, it was a very good deal for the prior owners. They had made several times their money. And two, at the time, the business was struggling objectively. It wasn't growing all that much. I think the trailing growth rate for restaurants was around one and change percent.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

20. “Also, we had a sense of actionability at Burger King, which sometimes you can see something that's very interesting, but you don't see a path to completion. And in Burger King, we saw that path because it was a company that had been taken private years before it was a successful LBO, had been taken back to the public markets, and the sponsors were in the process of sequentially exiting the business through blocks. We couldn't really see any strategic buyer for the business. So we figured that they might be amenable to an approach for someone that wanted to pay a premium to market and take the company private again.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

21. “Probably the best way to explain it is we'll only buy one business every few years, but we study a lot of them. Mutual friend of ours asked, Didn't Daniel bring you the Burger King idea? And he said, Yeah, but you should have seen the hundred other. We look at a lot of different businesses. We go pretty deep in many of them. I'd say we definitely went deeper in Burger King than anything else at the time because of how excited we were”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

22. “So, you're doing all this work before you even try to buy it. And I'm curious in your research process, how many different types of projects or different companies are you studying with that intensity? To decide, okay, that's the one you're going to go, knowing from the beginning you may or may not be able to buy anyone in the public markets that you like.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

23. “I know it sounds cliche, but with any investment, making sure that there is a large enough margin of safety, if you will, that Pro forma entry multiple was low enough that even folks like us probably wouldn't mess it up.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

24. “Many months of intense in depth research studying the industry, studying the history of the company, studying the company, studying its peers, spending a lot of time visiting restaurants both of the company and the peers. I remember Alex and I developed relationships with several franchisees. We tour the country and developing relationships with people and just learning and asking questions about how the business is being run and how it could be run better. Detailed benchmarking around the number of restaurants that the brand had in certain countries compared to what the peers had, understanding those underlying unity economics of how profitable the Burger King restaurants were compared to the peers in certain countries, ultimately getting comfortable that”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

25. “While it didn't make the investment memo, the enterprise value of the deal was around $4 billion. It was just over a billion in change of equity to buy the company. I had asked my then fianc ⁇, who's a physician and my mom, who's an attorney. I said, look, McDonald's is around $80 billion or so. Yum, I think at the time is $30 billion. What do you think Burger King is worth? And so for us, it was that billion of equity. The typical answer was, I don't know, half. McDonald's is worth 80. Baby Burging is worth $40. Or 20? Yeah. It met the smell test. Not one. Not one. Not one in change of equity capital required to do a Take Private.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

26. “Ultimately, that the business of Burger King was significantly smaller than the brand. It turned out that I wasn't alone. So the brand was a much bigger thing than the business, which is a great opportunity, meaning, of course, there is growth of the brand, but growing the business to become the size of the brand is a better proposition.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

27. “Yeah, I mean, I first came to the US in the early 70s to Miami. I had family live in there and I used to eat a Burger King every day. It was the store on 41st Street in Miami, which we still own. It's a company store. And I used to go there every day. And then, of course, after the deal became successful, there was some degree of suspicion even amongst my dear partners, whether that story was true or not. And ultimately, several years later, my mom passed. She had a habit of keeping everything. So I found this letter at her home from me in January 16th of 1975 basically describing I went to Burger King and ate whoppers every single day. I never liked to go to McDonald's. It was a hardcore Burger King fan and was interesting to see because as one of the outputs of the analysis was”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

28. “Cost structure, growth profile relative to its peers and to other companies that we were familiar with, we felt like there would be an opportunity if we were to take this business over to run it better. I remember we did some initial work and Alexa shared it with you and you grew up in Brazil and you told me you understand I'm very, very familiar with Burger King, which I was surprised at the time.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

29. “Studying the history of the business from the start, from the 1950s. And if you went back in time, you'd learn that the business after being founded by McLamore and Edgerton was subsequently sold several times between the 1950s and early 2000s. And that resulted in a series of management changes over the years. What we found interesting was that notwithstanding this frequent changing in ownership and management, the company flourished into the second largest fast food hamburger restaurant chain globally at the time around 12,000 restaurants, 80 plus countries, and to replicate something like that, it just felt like it would be really, really hard to do. And so I felt like it was a very good business operating on a really good business model. And when we compared its organizational structure.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

30. “We were looking at businesses to buy. This was back in 2009. We're looking at all sorts of different companies and we found Burger King, one of the regular screening exercises that we do of consumer businesses that are trading below a certain multiple, below a certain total enterprise value. And we saw it. We did a whole bunch of outside in research on the business and we developed a thesis basically around the company that looked something like the following great business, great business model. I think we were probably early to have an appreciation of the fully franchised business model and the value of the franchise business model. We felt that it was an iconic brand that had been around 50 plus years. Actually, we spent a lot of time”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

31. “There's probably no better way of getting a feel for this than diving into one of these companies. So let's do that with Burger King. And Daniel, maybe the place to start is when you're bringing this approach to really taking over a company and running it, how do you go about finding a business like Burger King to buy?”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

32. “To sound repetitive, but it's culture that if there's one word I could use, it would really be ownership. People who genuinely care and act like owners of the business that they're running. And so there's this line that sometimes there's a delineation our organizations we don't like to think of that being delineation between ownership and management. And the people who are running the company are the people who own the company. And I think it results in them being more entrepreneurial. It results in them bringing this owner's lens to the business, thinking about what's in the best interest of the company, which is also what's in the best interest of the shareholders as opposed to think, oh, what's in the best interest of the management? In our world, we like those to be blended together. And I think the reason it's compelling, if you look at the history with restaurant brands and Burger King, I'd say we're willing to give people a shot maybe a little bit earlier than they get a shot elsewhere.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

33. “Leadership that comes from someone that's a partner here typically, mini CEO, sometimes CFO, some back-end functions with people that have experience in our system that work in different deals with us, people from the business that have experience and knowledge. And by the way, people that will take advantage of a great opportunity to invest themselves or to roll their equity or to get more equity in the deal into the front of the house roles. And then over time, we bring a lot of young talent in so that the company breeds its culture and breeds its talent over time. And you can see the result of that in the company like RBI, where today 80% of the leadership team is people that are grown into the company.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

34. “Highest investment, but it was a totally separate vehicle. That investment we just basically got our money back wasn't a successful investment, but evalidated a fundamental premise of ours, which is we're not a venture capital for the downside case must be capital return or capital preservation like return of sorts. And of course, that's one of the key things that drives business selection and business quality. It drives capital structure decisions. For example, the next fund was the fund that bought Hunter Douglas, in which we only leveraged the business four times. So that's part of the approach, again, that we have. And then we have, of course, the ability to do another deal. So that's sort of the sequence.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

35. “Our say tolls in the water by virtue of not being involved in management just at the board was quite a successful investment for us multiple times our money on a declining market in the mid 2000s. And so there was a crisis, which by the way favored people to focus on efficiencies and things that we could provide ideas. So that was a good investment, but also it reinforced it to us that the end game was to control something and be involved in management. And that, in fact, happened at Burger King in 2010 and its subsequent acquisitions of another three brands in the course of the last many years. Then we had an acquisition of Heinz. The Heinz investment was successful. We made several times more money on the big private of Heinz. Then we had the craft investment, which was merged with the”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

36. “You were to compare and contrast the approach to EG capital with a more traditional private equity approach, I think the three main points I would make is one, we are the largest investors, we, the partners and affiliated entities, are the largest investors on these vehicles that do the deals, number one. Number two, each vehicle is deployed entirely in one situation. So it's 100% concentration. And thirdly, the intent with this business is always to be there for the long, long term. My co-founders have been investors of AB and Bev now coming on 35 years. We investors in RBI for 14 years now and counting. And in terms of your question on the sequencing, we had an investment in CSX, which was a railroad, which was our first way of getting.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

37. “Differently characterize it by saying we're trying to bring an owner operator approach to all facets of the business, be it cost or growth. You look at Burger King, this is a business that was operating at the time we bought it in 80 plus countries that had a 50-ish year history of successfully expanding into the second largest fast food hamburger chain in the world. Yet when we looked at it, it wasn't operating as profitably as its peers and it wasn't growing as fast. And so coming in, having a new refresh team with goals around cost management, goals around capital management, goals around growth in terms of the number of restaurants that this business should be opening each year and setting these bold, ambitious goals and hiring the right people and empowering the right people at the company to achieve them kind of allowed us to catapult.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

38. “The history of the deals you've done, you're buying what you think is a good business to begin with, and then you're applying this lens of efficiency. What are some examples of things that you found that you were able to, let's just say, take some costs out or drive efficiency that you might think from the outside, well, it's a good business, it's already run well.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

39. “Brings ownership and accountability to cost. It's about looking at cost as if you are the owners of the business as opposed to just the employees who are fine spending whatever budget is set for them.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

40. “At that moment, what would you need? And then, of course, you're going to have to compare that with what you have, what the peers have to make sense of it and derive actions and so on. But it's an approach where you take an intellectually honest grassroots view of cost.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

41. “Yeah. I mean, Ted, I probably should preface this by saying we had this big returns in companies like RBI, where I think we made 28 times the original billion plus capital we put in. And we had a 30% IRR in 14 years and things like that. And in spite of all the publicity, the zero-based budget gets the portion of that value creation that is directly associated with the efficiencies and therefore with the zero-based budget is small. I mean, frankly, the majority of that growth came from, again, the organic and the inorganic growth. But having said that as a means of introduction to your question, the zero-based budgeting process essentially attempts to look at the expense and the capital expenditure base without for a moment abstracting yourself from the existing numbers and from the peers. As if you were starting the business.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

42. “You think about our way of doing business and driving efficiencies, 3G has been well known for a long time for this concept of zero-based budgeting. To hear how that actually works when you first step into a company.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

43. “And we try to initially make this first phase the business more efficient, that frees up cash flow, it frees up focus to enhance or resume however the case may be, organic growth. And hopefully by the time we've established the basis of a culture and the business is clicking, we are able to source inorganic M&A growth opportunities. So that is the process we typically go through.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

44. “It ultimately means that we get very, very hands-on in the business. We attempt to chart a path value creation in the business that essentially typically has three phases to it. It does have an initial phase where we try to put together a team that combines some people that understandable ways of doing things, usually frankly on back-end leadership like CEO and then backhand position, CFO purchasing and things like that. And we try to combine that with people from the business on the sales, marketing front of the house jobs.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

45. “So I had joined the organization approximately a little less than eight years or nine years before out of the Harvard Business School. I joined out of school in the predecessor of private equity firm. They were starting in Brazil. And initially, I started as an analyst. I evolved to become a partner and most of my time there, I spent running one of the portfolio companies. This company that was a result of multiple railroad privatizations in Brazil. And that was a continuation of the model that had worked so far to the extent that the partners were able to acquire good business. One of the partners would take a CO role in that business. So I was a continuation of that approach. And I ran the company all the way to taking it public in early 2004, transitioned to a board role and moved my young family to New York City to start 2G Capital.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

46. “So Ted, we started twenty years ago originally as a family office of my co-founders, so just house capital. And what we intended to do originally was to replicate this approach of being long-term operating owners of good businesses, and it was subsequently companies took it all over the world, and then we wanted to attempt to do that outside of Brazil. And that was sort of the inspiration to set up 3G capital in New York City at the time.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

47. “3G Capital discusses a Berkshire affiliated investment in a leveraged buyout. Not a bad way to bridge the gap between the two icons that draw many across the United States from around the world. And if you tell your friends, colleagues, and peers about it, you can bond without the FOMO that might otherwise come. Thanks so much for spreading the word. Please enjoy my conversation with Alex Bering and Daniel Schwartz. Alex Daniel, thanks so much for joining me. It's a pleasure.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

48. “My guests on today's show to discuss 3G and the deal are Alex Baring and Daniel Schwartz, co-managing partners of 3G Capital. Our conversation covers the history of 3G, Alex's journey to form 3G Capital, and the 3G playbook. We then dive into the deal, covering the sourcing and deal dynamics, improving operations, growing the business, taking the company public unexpectedly, and reloading to buy Tim Hortons, Popeyes, and Firehouse subs. Today's Burger King is part of Restaurant Brands International, a public company with the ticker QSR with a $32 billion market cap and $50 billion enterprise value. This classic deal will widen your aperture on what's possible with a long-term compounding holding period and operational excellence.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

49. “3G is an organization with a storied history. Founded by Jorge Paolo Laman, Carlos Alberto Sicopira, and Marcel Harmand Teles, the group created an owner-operated model of investing. They rose to prominence through building the largest beer company in the world, initially buying local brewer Brahma in 1989, expanding it and merging with a competitor to become Ambev in 1999, merging with Interbrew to become IMBEV in 2004, and taking over Anheuser-Busch in 2008 to become AB in Bev. 20 years ago, Alex Baring, a young star on their team, moved to the U.S. to form 3G Capital and take the approach abroad. Burger King was the second largest hamburger fast food chain after McDonald's in 2010 when 3G took it private. What it accomplished since then has been extraordinary.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source

50. “3G capital's buyout of Burger King may be the most successful private equity deal you've never heard about. Over the last 14 years or the length of a typical private equity fund, 3G turned a $1 billion investment into $28 billion in value. The annual dividends from the investment accruing to 3G today are around $70% of its invested capital. The deal is one of the highest earning buyouts ever.”

    2024-05-06 · Capital Allocators · Classic Deal - Burger King by 3G Capital (EP.384) · IDENTIFIED FROM THE TRANSCRIPT · source