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In Dec-02 Texas Pacific Group, Bain Capital and Goldman Sachs Capital Partners acquired Diageo’s fast food restaurant subsidiary Burger King for US$1.5bn (US$1.2bn cash, US$86m assumed debt and US$212.5m subordinated debt). This implied the following multiples: 93% of sales (US$1.62bn, 1.4x net tangible capital turn), 5.0x LTM EBITDA (estimated at US$300m, 18.5% margin) and 7.2x LTM EBITA (US$207m, 12.7% margin).
The transaction was financed with US$750m in senior debt (2.5x EBITDA) and US$425m in subordinated debt (total debt 3.9x EBITDA) and US$325m in equity (78/22 debt to equity). The original agreed purchase price (July-02) amounted to US$2.25bn but was subsequently reduced to US$1.5bn after experiencing difficulties in financing (a condition of the deal).