Tims China seeks to shore-up growth with $194.5m funding drive

A Tim Hortons truck outside a METRO store in China | Photo credit: Tims China

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Tims China is building a new investment fund to shore-up its ongoing expansion in China.
 
In a press release, the company said it had received commitments from institutional investors, including affiliates of Cartesian Capital Group, LLC, Restaurant Brands International (RBI), and Silver Crest Management LLC, to invest up to $94.5m in Tim Horton’s five-year growth plan.
 
Additionally, Tims China is seeking up to $100m credit via an ordinary share purchase agreement. The new funding drive comes a year after Tim Hortons completed a fundraising round from investors Sequoia Capital China, Tencent Holdings and Eastern Bell Capital to facilitate the opening of 200 new stores in China.
 
The announcement also marks an ‘adjustment’ to the Tims China merger agreement, which will see the entry valuation of the company reduced from $1.7bn to $1.4bn.
 
In August 2021, Tim Hortons China merged with Silver Crest Acquisition Corp, paving the way for an IPO that was then projected to value the company at $1.7bn and setting an ambitious goal to open 1,500 stores within five years.
 
“These agreements, which follow the recent opening of our 410th store, mark another important milestone for Tims China. We expect that the PIPE and the CSF, combined with the convertible financing closed in December, will provide more than sufficient capital to fully fund our 5-year business plan,” said Peter Yu, Chairman of Tims China.
 
David Shear, President of RBI’s International business added that China was Tim Horton’s “most important” international market.

The joint venture between Tim Hortons’ parent company RBI and private equity firm Cartesian Capital Group first brought the Canadian coffee chain to the Chinese market in 2018.
 
Reporting its full-year results to 31 December 2021, RBI posted total revenues of $35.5bn, up from $30.7bn in 2020.
 
Tim Hortons achieved system-wide sales of $6.5bn, up from the $5.4bn posted in 2020. The Canadian coffee chain posted net income of $261m for the year and operated a total of 5,291 stores globally at the end of 2021, a net increase of 342 stores.