Upcoming AWS Coverage on Wendy's Co.
LONDON, UK / ACCESSWIRE / January 10, 2017 / Active Wall St. blog coverage looks at the headline from McDonald's Corp. (NYSE: MCD) as the Company along with CITIC Limited, CITIC Capital Holdings, and The Carlyle Group L.P. (NASDAQ: CG), announced on January 08, 2017, the formation of a collaboration, where the master franchisee would be responsible for McDonald's flagship in China and Hong Kong for the next 20 years. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.
One of McDonald's competitors within the Restaurants space, The Wendy's Co. (NASDAQ: WEN), is estimated to report earnings on February 14, 2017. AWS will be initiating a research report on Wendy's following the release of its next earnings reports.
Today, AWS is promoting its blog coverage on MCD and CG; touching on WEN. Get all of our free blog coverage and more by clicking on the links below:
http://www.activewallst.com/registration-3/?symbol=MCD
http://www.activewallst.com/registration-3/?symbol=WEN
Financial Details
The agreement will be executed for a reported $2.08 billion, where the consideration would be settled by cash and by new shares issued to McDonald's. Post the execution of this agreement, CITIC and CITIC Capital will hold the majority stake at 52% while Carlyle and McDonald's will own 28% and 20% of the venture respectively. The deal is contingent with respect to relevant regulatory approvals and would close in mid-2017.
Largest Franchisee outside US
McDonald's views this agreement as a step to establish the largest franchisee outside the US within China. This agreement would bring in fresh funding and offer the "much-needed" cash inflow for strategic expansion. The new Company will develop a growth strategy focused on Tier 3 and Tier 4 cities, where new restaurants will be opened, along with improved menus and retail digital leadership and delivery. McDonald's views the growth in China's consumer sector as a business expansion drive. Urbanization is on a new high, and so is the disposable household income in middle-class families. Ultimately, it would lead to greater spending on dining out, and hence, elevated business for the firm is viewed through this new collaboration.
On May 04, 2015, McDonald's announced initial steps for a turnaround plan, where, franchising restaurants would be a priority. According to the statement, the Company expected to franchise 3,500 restaurants by the end of 2018 and hence increasing the global franchised percentage from 81% to 90%.
The Carlyle Group
Carlyle views this development as a chance to partner with a well-established brand with a considerable market share and growth potential in mainland China. Equity for the transaction will reportedly be generated from Carlyle Asia Partners IV. As of September 30, 2016, the firm had invested more than $7 billion of equity in about 90 transactions across China. Recently, on December 30, 2016, Carlyle Group announced the acquisition of 75% of Gastronomía & Negocios S.A, Chile's largest franchiser in the quick service restaurant segment. More recently, on January 05, 2017, Carlyle Group completed the acquisition of Claritas from Nielsen (NYSE: NLSN), in an attempt to generate better consumer segmentation insights.
CITIC Limited
CITIC Limited is one of the largest conglomerates operating in China and overseas. This investment offers the firm an expansion in the portfolio, where greater exposure would be liaison to the firm in the consumer sector, which is viewed as the economic backbone of the nation for years to come. CITIC views this opportunity for synergies with existing businesses it holds.
As of December 31, 2016, McDonald's operates more than 2400 restaurants across China and 240 restaurants in Hong Kong. Employing a workforce of over 120,000, McDonald's serves more than one billion customers annually in China.
Stock Performance
McDonald's share price finished yesterday's trading session at $120.43, marginally sliding 0.27%. A total volume of 3.02 million shares exchanged hands. The stock has advanced 6.98% and 7.50% in the last three months and past twelve months, respectively. The Company's shares are trading at a PE ratio of 22.50 and have a dividend yield of 3.12%. The stock currently has a market cap of $101.33 billion.
Carlyle' stocks gained 0.30% to end trading at $16.70. A total volume of 1.05 million shares exchanged hands which was higher than the 3 months average volume of 0.74 million shares. The stock has gained 11.25% and 9.96% since last three months and six months, respectively. Additionally, Carlyle's stocks have gained 9.93% since the start of the year. The net market capital for the firm stood at $5.34 billion with a dividend yield of 11.98%.
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