A New CEO for Burger King - Analyst Blog

3G Capital recently announced the appointment of Bernardo Hees as the chief executive officer (CEO) of Miami-based Burger King Holdings Inc. (BKC). Hees will replace Burger King’s current chairman and chief executive officer, John Chidsey, following the closure of 3G Capital’s pending acquisition deal.

On September 2, Burger King announced that it is being acquired by the private investment firm 3G Capital for $24 per share, or $4.0 billion including the debt of the company.

John Chidsey will continue in his current capacity until the transaction closes. After the acquisition, he will assume a newly created position of co-chairman of the board. Alex Behring, managing partner of 3G Capital, will partner John Chidsey. The transaction is expected to close in the fourth quarter of this calendar year, following regulatory approvals and other customary closing conditions. Moreover, there will be a 40-day period during which Burger King can consider other lucrative offers from any third party received by October 12. However, the chance of a higher bid appears dim.

Bernardo Hees joined 3G Capital as a partner in July 2010. 3G management expects Hees’ vast industry experience, both on operational and leadership fronts, to benefit Burger King over the long term domestically as well as internationally.

Since January 2005, Hees has been the chief executive officer at America Latina Logistica, Latin America’s largest railroad and logistics company. Under Hees’ leadership America Latina Logistica saw an enhancement in performance that resulted in marked improvements in the company’s revenues and profitability.

Hees started his journey at America Latina Logistica in 1998 as a Logistics Analyst, subsequently holding an array of managerial and executive positions. In 2004, he held the position of director-superintendent.

Burger King, the world’s second-largest hamburger chain after McDonald’s Corp. (MCD), recently reported its fourth quarter and fiscal 2010 results. The fourth quarter and fiscal 2010 earnings dropped 16.0% and 8.0% year over year to 36 cents and $1.36, respectively. Total revenue plunged 1% year over year in both the quarters and fiscal year. The results were hurt by sagging comparable store sales and the discount war among fast-food chains as the restaurant industry remains under pressure, which the company expects to continue in 2011.

Under this current scenario, we anticipate that 3G management will focus on the strategic transformation of Burger King under the able guidance of Hees. Although 3G did not disclose its plans for the future, it mentioned that Burger King’s overseas expansion, especially in Asia and Latin America, will remain one of the key growth drivers.