Tim Horton's CEO, Marc Caira in the former corporate Tim Horton’s office in Oakville, Ontario on Sept. 16, 2013.Peter Power/The Globe and Mail
Even Marc Caira's mother won't let him live it down. To her, "I'm the guy who sold Tim Hortons."
Accepting an award at the Canadian Dealmakers gala dinner last week, the restaurant chain's former chief executive admitted he still takes some heat for the controversial deal with 3G Capital Inc., which saw the Brazilian private equity firm buy the Canadian company for $12.5-billion in 2014.
Not only has his own mom cast him in a new light, Mr. Caira said he is still questioned about the deal by people of all stripes. Just a few days before his acceptance speech, a long-time Tim Hortons customer flat out asked him: "Is this a good deal?"
The questions keep coming because 3G, which owns Burger King, largely pursued the deal for tax purposes. By buying Tim Hortons and relocating the parent company's headquarters to Canada, Restaurant Brands International Inc., as the combined company is now known, will likely pay far less in taxes than it would have if it were domiciled in the U.S. .
For Tim Hortons and its franchisees, however, there's a lot of uncertainty – which has raised question marks about Mr. Caira's legacy.
To defend the deal, the former CEO, who is now a vice-chairman at Restaurant Brands, cited stock market performance. Anyone who bought Tim Hortons shares during its 2006 initial public offering and held them until the 3G deal closed would have made a 300 per cent return, whereas the S&P/TSX Composite Index's equivalent return was 45 per cent. (Keep in mind, though, that much of that return had nothing to do with his deal.) He also noted 3G ultimately paid a 62 per cent premium to where his company's stock was trading when the private equity firm made its first offer.
But many Canadians were not shareholders, so they didn't get those benefits. Instead, they simply wonder what will happen to their arguably iconic chain, which is why they keep asking questions.
It could be that the doubters are worrying for no good reason. Tim Hortons has survived a foreign owner, after all. Wendy's International bought the chain in 1995.
Still, Mr. Caira knows there's much to prove. Is this a good deal?
"The real answer will [come] five years from now when we see how it performed versus the expectations we've set for ourselves," he told the audience.
Tim Kiladze