Monday 27 June 2022

Tim Hortons China plans listing on Nasdaq through a special purpose acquisition company

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MILAN – Tim Hortons China is planning to go public in New York via a merger with a special purpose acquisition company (SPAC) in a deal that could rapidly speed up the chain’s expansion in the growing Chinese coffee market. Restaurant Brands International confirmed Monday that its joint venture with private equity firm Cartesian Capital Group, which includes Tencent and Sequoia Capital as major shareholders, has entered into a business combination agreement with Silver Crest Acquisition Corp.

The joint venture, officially named TH International Ltd. but often branded Tim Hortons China, opened the first Tim Hortons in China in Shanghai in 2019.

The company says the deal with Silver Crest, a special purpose acquisition company, would see TH International traded on the Nasdaq stock exchange.

Documents filed with the U.S. Securities and Exchange Commission pegged the implied value of Tim Hortons China at US$1.69 billion, with the expected value of the new combined entity when it starts trading at above US$2 billion. The transaction is expected to complete in the fourth quarter.

Restaurant Brands says the merger, which still requires regulatory approval, will see Tim Hortons benefit from China’s rapidly emerging coffee market.

An investor presentation by Tim Hortons China included in regulatory filings said the company plans to nearly double its footprint from its current store count of 199 to 388 locations by the end of 2021.

The company plans to open more than 2,500 new locations in five years, it was also said.

Tims is operated as a venture between the private equity firm Cartesian Capital Group and Restaurant Brands International, which owns Tim Hortons as well as the franchises for Burger King and Popeyes. Sequoia Capital China and Tencent Holdings are also investors.

The existing shareholders will own about 80 per cent of Tims after the merger with Silver Crest, according to the filings.

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