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Chicago bank aquires majority interest in Whataburger

Whataburger
Whataburger announced today that BDT Capital Partners, LLC, a merchant bank that advises and invests in family and founder-led companies, has agreed to acquire through its affiliated funds a majority interest in Whataburger.

Together, BDT and the Whataburger team will begin exploring expansion plans – while staying true to the brand it has been over the past 69 years.

The company also announced an internal leadership realignment to position the brand for long-term growth and success. Most notably, the company named several new internal promotions, including a president, chief operating officer and chief restaurant operating officer.

Whataburger headquarters will remain in San Antonio.

New partnership poises the brand for long-term growth

“Whataburger has grown significantly over the years. And, in order to keep satisfying our customers, we’ve been exploring different options to expand the brand and introduce it to new audiences. We’ve gone through this process purposefully and diligently because we wanted to find a partner who honors our values, culture and 69-year legacy of family tradition,” said Whataburger President/CEO Preston Atkinson.

“We’re excited about the partnership with BDT because they respect and admire the brand we’ve built,” Atkinson continued. “They want to preserve it while they help us continue growing a sustainable, competitive business over a long period of time. They don’t plan to change our recipe for success.”

BDT will be key in providing strategic vision and long-term growth capital to the tenured Whataburger leadership team

“Whataburger is an iconic brand and extraordinary company with an important legacy of family ownership, loyal customers, valuable community involvement, dedicated and talented employees, and a highly experienced management team,” said Tiffany Hagge, Managing Director of BDT Capital Partners. “We look forward to a long-term partnership with the Whataburger team, continuing their commitment to serving high-quality, great-tasting food at a value and delivering a superior customer experience. We are excited to support Whataburger as they continue to innovate and pursue accelerated growth in existing and new markets. This investment is a perfect example of BDT’s business model – to partner and invest alongside exceptional family businesses, with strong cultures, deep community ties and loyal customers.”

Morgan Stanley and Ernst & Young (EY) acted as transaction advisors and Jackson Walker acted as legal advisor to Whataburger. Norton Rose Fulbright acted as legal advisor to BDT Capital Partners. Morgan Stanley Senior Funding, Inc. will provide the committed financing to support the transaction. Closing of the transaction is expected later this summer and is subject to customary regulatory and other conditions. Additional terms were not disclosed.

Tenured Whataburger core leadership team at the helm

Current Whataburger President/CEO Preston Atkinson and Board Chair Tom Dobson also elevated several leaders within the company. Whataburger’s leadership team holds more than 150 years of combined experience growing the Whataburger brand, and for that reason, all positions named were internal promotions.

“As the brand embarks on a growth and expansion plan, we decided the time was right to promote new leadership to carry the company forward,” said Atkinson. “This leadership team has the right combination of Whataburger core values, strategic vision and people-centered leadership to take us into the future.”

This leadership realignment will allow Atkinson and Dobson to step aside and focus on operating Las Aguilas, a diversified investment company established by the Dobson family in 2011 which is focused on real estate and philanthropy.

Atkinson and Dobson will hold seats on the Whataburger board of directors to provide ongoing guidance and ensure a smooth transition.

The Dobsons have built more than a burger chain. Whataburger is a place that feels like home to 43,000 employees, called Family Members, and millions of customers. It’s a brand built on pride, care and love. It’s a place people count on in their communities.

While this has been a difficult and emotional decision for the family, Tom, Lynne and Hugh Dobson believe BDT Capital is the right partner to take Whataburger into the future.

“This is both exciting and bittersweet for the Dobson family. Whataburger has been the heart and soul of our family legacy for nearly 70 years, but we feel really good about the partnership with BDT,” said Tom Dobson. “They have a track record of success with businesses as special as ours that want to grow, while preserving culture and family history. They are trusted advisors and partners who have worked closely with other family businesses and they have a tremendous reputation for doing the right thing.”

“More than anything, we’re beyond grateful for our 43,000 Whataburger Family Members who work in our restaurants 24/7,” Dobson continued. “And to our Whataburger fans: You’re part of our family. And as we grow, we know our Whataburger team will continue to make you proud.”

Whataburger has focused on its fresh, made-to-order burgers and friendly customer service since 1950 when Harmon Dobson opened the first Whataburger as a small roadside burger stand in Corpus Christi, Texas. Dobson gave his restaurant a name he hoped to hear customers say every time they took a bite of his made-to-order burgers: “What a burger!” Within the first week, people lined up around the block for his 25 cent, 100 percent beef burgers served on five-inch buns. Today, the company is headquartered in San Antonio, Texas, with 828 locations in 10 states with sales of more than $2 billion annually.

BDT Capital Partners provides family and founder-led businesses with long-term, differentiated capital. The firm has raised more than $15 billion across its investment funds and has created and manages an additional $4.7 billion of co-investments from its global limited partner investor base. The firm’s affiliate, BDT & Company, is a merchant bank that works with family and founder-led businesses to pursue their strategic and financial objectives. BDT & Company provides solutions-based advice and access to a world-class network of business owners and leaders.

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