There are some life goals that are nice to complete by age 34. Perhaps you could have a child, or failing that, a dog. Maybe you could own a house, or at least some furniture that is not from IKEA. Or, if you’re Daniel Schwartz, you could be the chief executive officer of the world’s third-largest fast-food chain.
With the takeover of Tim Hortons Inc. by Burger King Worldwide Inc., the young executive now finds himself in the position of leading a company worth more than $20-billion (U.S.) with 18,000 locations worldwide. He will oversee the operation of two companies with distinct histories, answer political questions about tax inversion in the U.S., and face a federal review in Canada on whether the foreign takeover represents a net benefit to the country.
It will be a big test for an executive who is relatively new to the fast food business. Unlike many restaurant executives, Mr. Schwartz did not climb the internal ranks of the industry.
The Cornell graduate joined the company as chief financial officer in 2010 after organizing its buyout by 3G Capital, the private equity firm where Mr. Schwartz is a partner. He was only 30 at the time. Despite offering a 46-per-cent purchase premium at the time, the $3.3-billion deal has been successful for 3G Capital. Only 18 months after the purchase, Burger King was taken public. The stock is up 95 per cent since then.
Prior to joining Burger King, Mr. Schwartz’s experience was exclusively financial.
He started as an analyst at Credit Suisse First Boston doing mergers and acquisitions from 2001 to 2003. From there, Mr. Schwartz joined the Connecticut-based hedge fund Altair Capital Management, where he worked from 2003 to 2005. He then joined 3G Capital, where he became a partner in 2008.
Raised in Albertson, N.Y., a hamlet of 5,000 located on Long Island, Mr. Schwartz attended the Wheatley School. According to the school’s yearbook, Jericho Bagels was the most popular breakfast choice for students, but Burger King was the place to go for lunch.
Mr. Schwartz has come a long way in a short time, but he has not sought the publicity that comes along with his success.
In a July feature in the magazine Businessweek, he did not give an interview for a lengthy article about him and his fellow young executives who have turned around Burger King’s fortunes.
While analysts have been enthusiastic about Burger King’s cost reductions, product development, and expansion over the past few years, there are challenges too. Cost-cutting delivers diminishing returns over time, and McDonald’s still represents the leading burger brand in the U.S., a position it has occupied for decades.
And with the deal, Mr. Schwartz has moved to the centre of controversy about takeovers that appear to be crafted for the purpose of minimizing corporate tax.
In a conference call, he insisted that is not the case with the Burger King combination with Tim Hortons.
“This is not a tax driven deal,” he said. “This is about growth and creating value.”