Whataburger is well known for it's styrofoam cups, the fast food chain can be found throughout Texas.
Whataburger announced layoffs and furloughs across its stores in 10 states Monday in response to the coronavirus pandemic. Credit: Scott Ball / San Antonio Report

A Chicago merchant bank has agreed to acquire the San Antonio-based fast-food chain Whataburger.

Whataburger announced Friday that BDT Capital Partners, a bank that advises and invests in family- and founder-led companies, will acquire a majority interest in the 69-year-old business known for its orange-and-white striped color scheme and large burgers. Terms of the deal were not disclosed, but a recent Reuters report stated that Whataburger could be valued at more than $6 billion.

“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,” stated Tiffany Hagge, managing director of BDT Capital Partners in a press release. “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.”

As part of the acquisition, several Whataburger executives are being promoted, and BDT has plans to expand the enterprise, according to the release. Whataburger headquarters will remain in San Antonio.

“Whataburger has grown significantly over the years,” said Preston Atkinson, Whataburger’s president and CEO. “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’re excited about the partnership with BDT because they respect and admire the brand we’ve built. They don’t plan to change our recipe for success.”

Harmon Dobson opened the first Whataburger in 1950 as a small roadside burger stand in Corpus Christi. Harmon’s son, Tom Dobson, took the reins in the 1990s. Today, the company is headquartered in San Antonio, with 828 locations in 10 states and annual sales of more than $2 billion.

Atkinson and Dobson are stepping down to focus on Las Aguilas, a diversified investment company established in 2011 by the Dobson family. They will hold seats on the Whataburger board of directors through the transition.

News of a possible sale was announced by the family-owned company in May. A spokeswoman said at the time that it had hired investment bank Morgan Stanley to explore selling a minority stake to a financial investor or private equity firm.

BDT Capital Partners was founded in 2009 by Byron David Trott and is headquartered in Chicago. A Bloomberg listing states the bank seeks to invest in North America and prefers to take a majority stake of the companies it acquires.

BDT holds stakes in the Sara Lee’s coffee brand, Panera Bread, Peet’s Coffee & Tea, Caribou Coffee, Krispy Kreme Doughnuts, and Einstein Bros. Bagels, among others. In January, BDT entered into an investment partnership with Whistlepig, a rye whiskey distillery in Vermont.

The deal is expected to close later this summer, subject to regulatory approvals.

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Shari Biediger

Shari Biediger is the development beat reporter for the San Antonio Report.