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McDonald's (MCD) dumps Boston Market

Posted Aug 7th 2007 10:35AM by Tom Barlow (RSS feed)
Filed under: Deals, Private equity, McDonald's (MCD), Chipotle Mexican Grill'A' (CMG)

McDonald's (NYSE:MCD) took another step in narrowing its focus to its core business yesterday, announcing the sale of its Boston Market business to private equity firm Sun Capital Partners, Inc. The company did not divulge the sale price.

McDonald's purchased the chain in 2000, when aggregation was the hot button in the industry, for $173.5 million. Boston Market currently has $180 million in assets and $89.1 million of liabilities.

The move makes senses for both parties. Much like its earlier divestiture of Chipotle Mexican Grill (NYSE:CMG), cutting Boston Market loose will free up more cash for McDonald's to reinvest in growing the mother ship, and will further eliminate distractions to its strategic plan.

For Sun Capital Partners, the expertise gained by the management of its other holdings in the restaurant industry, including Real Mex, Bruegger's Bagels, Fazoli's, Garden Fresh and Souper Salad, should aid it in maximizing the value of the Boston Market brand.

Heinz FY 2007 results: Nothing to throw tomatoes at

Posted Jul 12th 2007 7:27PM by Victoria Erhart (RSS feed)
Filed under: Earnings reports, Good news, Press releases, Competitive strategy

Heinz Company (NYSE: HNZ) recently released 4Q as well as FY 2007 results. Raise a toast of tomato juice because Heinz has implemented its multiyear product innovation and growth plan in all aspects. At its recent close of $47.20, the stock has not moved much from its beginning-of-the-year price of $45.75, so shares are still bargain-priced for what an investor gets.

Heinz's P/E is right at industry average, but its EPS is above industry average. Both growth and income are on track to exceed estimates and the company recently raised the dividend rate 8.6%, in addition to a FY 2006 dividend rate raise of 16.7%.

Don't just think ketchup when thinking Heinz. The company also owns such well-known brands as Boston Market, Smart Ones (diet foods), Classico (pasta sauces), Ore-Ida (frozen taters), and Weight Watchers. All these products are eaten by consumers every day and there is no mystery about the business model. Heinz stock merits a careful look from investors.

Continue reading Heinz FY 2007 results: Nothing to throw tomatoes at

McDonald's mulls options for Boston Market

Posted Jan 15th 2007 3:16PM by Zac Bissonnette (RSS feed)
Filed under: McDonald's (MCD)

In December of 1999, McDonald's Corp. (NYSE: MCD) purchased Boston Market out of bankruptcy for 173.5 million dollars. The company was one of the great rapid-growth story stocks of the era and, much like Krispy Kreme, its rapid growth was too rapid and the company found itself in trouble.

Today, there are reports that MCD may spin-off or sell the Boston Market chain in an effort to re-focus attention on the burger business. Seven years ago, the company was pursuing growth through diversification but that does not appear to be the case now. The move to sell the company comes shortly after the successful spin-off of Chipotle which generated a tax-free windfall for the shareholders of McDonald's.

The decision (or at least contemplation of a decision) to spin-off Boston Market is indicative of bullishness on the future of the core brand on the part of McDonald's executives. And if it's anything like Wendy's spin-off of Tim Horton's, the news will lift MCD shares substantially this week.

McDonald's might sell Boston Market chain

Posted Jan 12th 2007 11:55AM by Brian White (RSS feed)
Filed under: Deals, Products and services, Consumer experience, Competitive strategy, McDonald's (MCD)

The largest food service company in the world -- McDonald's Corp. (NYSE:MCD) -- may be planning to sell the chain of Boston Market restaurants. Boston Markets is known for its chicken, and McDonald's may want to focus on its hamburger business.

According to the Chicago Tribune this morning, McDonald's was going to review its options about the Boston market chain -- but that the hamburger franchise was going to sell the Boston Market chain eventually. Of course, a McDonald's representative was not available for comment, but I am sure a statement will be made soon. If not today after the markets close, then early next week.

The Boston Market chain was acquired by McDonald's in 1999 in a bankruptcy auction for just over $173 million as it wanted to diversify its food portfolio. It also acquired a controlling interest in Chipotle Mexican Grill Inc. (NYSE:CMG) which has since been spun off in an IPO in October 2006. Now McDonald's is apparently no longer looking to diversify its offerings in the food arena but wants to go back to what it does best -- selling hamburgers and french fries.

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Last updated: November 27, 2009: 09:41 AM

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