Seeking Alpha

Blackstone's Heartland Food reportedly on the block

  • Heartland Food is the second-largest owner of Burger King restaurants with about 330 locations in eight Midwest states. Blackstone (NYSE:BX) is the owner by dint of its 2008 GSO Capital Partners acquisition.
  • Heartland has annual sales of more than $420M, but things are sluggish in the fast-food world, with sales rising just 0.7% last year according to IBISWorld. Burger King Worldwide (NYSE:BKW) said its revenue fell 6.1% to $261.2M in Q2.
  • Burger King "supports Heartlands efforts and will work closely with its leadership moving forward," says a BKW spokesman.
Comments (6)
  • Richard Adams
    , contributor
    Comments (179) | Send Message
     
    This kind of thing is why Burger King will never really succeed. Huge franchisees changing hands, the entire company constantly changing ownership. McDonald's has a lot of challenges right now but at least they have stability.
    15 Aug, 03:46 PM Reply Like
  • C. Campbell Black
    , contributor
    Comment (1) | Send Message
     
    Anyone hear who's been engaged to run the process?
    15 Aug, 03:55 PM Reply Like
  • J Mintzmyer
    , contributor
    Comments (3663) | Send Message
     
    $TAST?
    15 Aug, 04:15 PM Reply Like
  • Moon Kil Woong
    , contributor
    Comments (11135) | Send Message
     
    This market is completely absurd and Burger King is just an example of it. With a growing focus on growth and short term gain, stable companies are sold abandoned or forced into a death dance trying to please the growth oriented investor who is so deluded they even sell stable companies and buy into high PE multiple stocks with slowing growth and profitability.

     

    The simple fact is the earnings growth of most "growth" stocks are dropping even as their stocks hit new highs on buybacks or utter ridiculous PE valuations in expectation for the US 3% growth that bulls have been screaming is right around the corner for over 2 years now.

     

    It is true the government and central bank can keep the market up with easy money for a while longer, but the real investor should know it is time to look at the exit doors, because inevitably when valuation moves opposite of fundamental value eventually something pulls them back together. Unless market bulls think the US is going straight up socialistic they are in for a surprise because there has not been anything left in the capitalist playbook to throw at this economic morass for quite some time, primarily because the sluggishness of it is already the result of our embrace of very non-free market mechanisms more suited for a sluggish communist state than the US.
    16 Aug, 04:12 PM Reply Like
  • Tai Yu
    , contributor
    Comments (349) | Send Message
     
    Prices of BKW end of yr '13 and its Friday close are respectively $22.5 and $28.61 for an impressive 27% paper profit. Corresponding prices for MCD are $95.4 and $93.7, a drop of 2% in the same period.

     

    MCD may actually be heading to become a faded glory unless it can re-engineer itself fast. Perhaps it could learn something from CMG that it divested in 2006.

     

    Let us look at MCD's margin, the gross margin and net margin are respectively 38.7% and 19.5%. These may seem ok until one sees the corresponding figures are 80% and 25.8% for BKW. Is this a reflection that BX is doing a better job than management at MCD despite the latter's glorious past history?

     

    The fast food business in American is open to intense competitions among major players that include WEN and DNKN and may not the best industry to invest in.

     

    DNKN's trailing PE is a lofty 31, MCD is 17 and BX an unbelievable 12.7. I would agree with Moon these fast food names are over-priced and investors can vote with their feet, nevertheless.

     

    16 Aug, 06:52 PM Reply Like
  • Richard Adams
    , contributor
    Comments (179) | Send Message
     
    McDonald's will make noises about re-engineering but the size of the system and the size of the bureaucracy will keep it from happening.
    17 Aug, 07:15 AM Reply Like
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