Is Burger King’s owner planning an acquisition?

Burger King Worldwide is no more. With the acquisition of Tim Hortons, the home of the Whopper has a new name: Restaurant Brands International (NYSE: QSR  ) .

Technically, a burger chain and coffee shop satisfy the use of the word "brands," but the name seems to call out for more. 3G, Restaurant Brands' controlling shareholder, has a history of building conglomerates (Anheuser-Busch InBev), and it could be about to do so again. In a recent Bloomberg interview, hedge fund manager Bill Ackman -- also a top Restaurant Brands shareholder -- suggested as much, noting that Restaurant Brands may be on the hunt for additional takeover targets.

But what would Restaurant Brands buy? There are literally dozens of fast food chains the company could acquire, but a few possibilities stand out.

Potential criteria
To find out what chains Restaurant Brands may be interested in, it's worth looking at its acquisition of Tim Hortons.

3G took Burger King private in 2010, buying the then slow-growing fast food chain for a modest $3.3 billion. Under 3G's control, Burger King pursued growth and cash flow. Its strategy centered around slashing costs, selling restaurants to franchisees, and radically reinventing its menu (a process that continues today). It returned to the public markets in 2012, at a valuation of around $5 billion.

The transformation worked: Burger King's same-store sales rose in 2013 and 2014, and its earnings per share steadily increased as it added additional restaurants. By the time it announced plans to buy Tim Hortons, the stock had doubled from its IPO.

The acquisition of Tim Hortons gives Burger King's management a new brand to tinker with and expand. Virtually all of Tim Hortons locations are in Canada -- 3G can use its international expertise to take the chain global. Moreover, although Burger King serves coffee and breakfast, it is not a true competitor, allowing both chains to peacefully coexist. Finally, like Burger King post 3G ownership, Tim Hortons operated as a fully franchised business, with few corporate-owned stores.

Anything is possible, but Restaurant Brands' interest may lie with highly franchised restaurants that have growth potential and don't directly compete with its existing brands.

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