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Burger King-fed 3G Capital has billions lined up for next deal

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Illustration: Annelise Capossela/Axios

3G Capital has billions of dollars organized for its next major bet, sources close to the PE firm tell Axios.

Why it matters: Long-term investor 3G does one large deal every few years and is "casting a wider aperture" that looks outside traditional consumer retail.

Catch up quick: 3G co-founder Alex Behring recently touted the 28x return it gained on the $1 billion in equity it invested in Burger King.

  • The firm's last big consumer transaction was the $7.1 billion deal for 75% of window covering maker Hunter Douglas in 2021. The company's family owners the Sonnenbergs retained a 25% stake.

What we're hearing: Hunter Douglas represents the kind of "family-owned crown jewel" business 3G would like to invest in, sources say.

  • The PE firm is more flexible on deal size and is willing to consider both smaller and much larger opportunities in the U.S. and abroad, the sources say.
  • 3G is disciplined and price-sensitive, they say, and it likes transacting when others aren't (it bought Burger King coming out of the financial crisis).
  • As for timing, 3G historically has completed an acquisition of a sector platform, to which it can add bolt-ons, once every few years.

The big picture: Consumer private equity investment hit its slowest pace since 2018 in Q1, per data provided by LSEG to Axios, and the asset class is starved for new deals.

Zoom in: 3G doesn't intend to acquire any business that competes with AB InBev, Hunter Douglas, or Burger King-parent Restaurant Brands International, sources say.

Context: The firm has made healthy returns on AB InBev — as well as with Heinz, despite the company's ill-fated $45 billion merger with Kraft in 2015.

Yes, but: 3G only broke even on Kraft, given some of the struggling brands such as Maxwell House, Oscar Meyer, Planters Peanuts (sold to Hormel), and Kraft cheese.

How it works: 3G raises a new vehicle for each separate deal, rather than making multiple investments out of a single fund.

  • Its partners are key investors and in the past, it has teamed up with the likes of Warren Buffett's Berkshire Hathaway.
  • It primarily raises funds from wealthy individuals or family offices, though it also taps top-tier institutional investors.
  • The company's has had a presence in AB InBev for 35 years and in Burger King for 14 years.
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