Guy Hands Hopes for Happy Deal With McDonald's Restaurants Buy
January 27 2017 - 09:56AM
Dow Jones News
By Simon Clark
Guy Hands, a pioneer of the European private-equity industry,
agreed to buy McDonald's Corp.'s Nordic restaurants for an
undisclosed amount with plans to work on the business with his
family.
McDonald's said that Mr. Hands will become its so-called
development licensee for Norway, Finland, Denmark and Sweden,
overseeing the franchise network. Mr. Hands will provide capital to
expand the business, which has about 435 restaurants in the
region.
The announcement shows Mr. Hands is now funding his own deals as
well as finding them. Private equity deal makers usually raise
money from investors like pension managers and insurers to fund
takeovers of companies whose performance they then try to improve
before selling them on within five years for a profit.
Mr. Hands is named as the buyer of the Nordic franchise, rather
than his London-based investment firm, Terra Firma Capital Partners
Ltd.
Terra Firma once raised multibillion-dollar funds from investors
to buy pubs, cinemas, garden centers and other companies. The firm
got into difficulty with its unsuccessful acquisition of music
publisher EMI Group in 2007. The deal lost GBP1.75 billion ($2.2
billion) for Terra Firma and co-investors. Last year, Mr. Hands
dropped a multibillion-dollar lawsuit against CitigroupInc. in
which he accused the New York-based bank of misleading him during
the EMI acquisition.
"I and my family look forward to working with the McDonald's
teams in place across the region," Mr. Hands said in a
statement.
Mr. Hands' wife Julia owns a chain of British hotels. The
husband-and-wife-team "intend to leverage their industry experience
to further develop the McDonald's brand," according to the
statement. Mr. Hands couldn't be reached for comment.
The financier is chairman and chief investment officer of Terra
Firma. In 2015, he hired Justin King, the former chief executive
officer of British supermarket chain J Sainsbury PLC, as vice
chairman. At the time, Mr. Hands and Mr. King said they planned to
raise a new buyout fund for Terra Firma.
McDonald's is selling the Nordic franchise as part of long-term
plans to franchise 95% of its stores globally. Since the beginning
of 2015, McDonald's has sold nearly 1,000 of its restaurants to
franchisees, the company said in October.
Earlier this month, the Oak Brook, Ill., company said it would
sell an 80% stake of its China operations to a group of investors
that includes U.S. private-equity firm Carlyle Group LP and China's
Citic Ltd.
"We look forward to welcoming Guy Hands as our strategic partner
in the Nordics," said Ian Borden, president of McDonald's
foundational markets.
Mr. Hands told students in London earlier this month that he
suffered from dyslexia and dyspraxia at school, yet managed to
attend Oxford University and then join Goldman Sachs Group Inc. He
has since become very wealthy. In 2015, he said that at least half
of the EUR1 billion ($1.07 billion) Terra Firma had available to
invest was his own money.
"For me to succeed, I had to come up with different ideas and
break the norm," Mr. Hands told the students at the London School
of Economics. "You have to be willing to make mistakes. And you
have to be prepared to fail, because that's the only true way to
learn."
Write to Simon Clark at simon.clark@wsj.com
(END) Dow Jones Newswires
January 27, 2017 09:41 ET (14:41 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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