Who would’ve thought that sovereign wealth funds (SWFs) and tacos mix well together? Well, not us but there must’ve been some rationale behind Mubadala’s recent acquisition of one of the largest Taco Bell (YUM) franchisee groups in the US.
At a time when fast-food players like Wendy’s (WEN) are partnering with the likes of Alphabet’s (GOOGL) Google to bring fancy features like AI-driven voice orders, Mubadala’s bid to enter the space shows that it’s catching onto the food and beverages (F&B) sector. Mubadala’s acquisition target, K-Mac Holdings, is an operator of about 300 Taco Bell outlets across the US, while it was previously owned by US PE company, Lee Equity Partners. The acquisition basically gives Mubadala the right to be the new franchisee for the 300+ restaurants – a decision in line with the SWF’s $1.8b worth of investments in the F&B sector over the past seven years. In addition, Taco Bell’s parent company, Yum! Brands, saw its stock price close at a 1.3% increase yesterday.
why it matters
Mubadala Capital, the SWF’s specific investment arm that carried out the acquisition, now has $9b in assets under management - and with $1.6b raised for another fund, the SWF has no intentions of slowing down its deal pipeline.