Restaurant Brands International Inc. QSR, -0.62% said Monday that it has agreed to acquire Firehouse Subs, a sub sandwich chain founded in Jacksonville, Fla., for $1 billion in cash, funded through cash-on-hand and debt. The acquisition is expected to be earnings accretive immediately. Restaurant Brands’ existing chains include Burger King, Tim Hortons and Popeyes.
Firehouse Subs was launched in 1994 by two brothers, Chris Sorensen and Robin Sorensen, who are former firefighters. Firehouse Subs has 1,200 locations across 46 states, Puerto Rico and Canada. The company is 97% franchised and is expecting 2021 system-wide sales of $1.1 billion and 20% U.S. comparable sales. Restaurant Brands estimates the value of the U.S. quick-service sandwich category at $30 billion. After the close of the transaction, the company will continue to be managed by Chief Executive Don Fox and Chief Financial Officer Vincent Burchianti. Restaurant Brands shares edged up nearly 1% in Monday premarket trading, and the stock has fallen 6.4% for the year to date. The S&P 500 index SPX, 0.19% is up 24.7% for 2021 so far.