First Round: Heinz boss on the sauce(2)

There’s just so much to like about the $23 billion 3G Capital/Warren Buffett/Heinz buyout.

Of course, First Round speaks not of such quotidian things as favourable price/earnings ratios, solid free cash flows, established distribution networks or even – to utilise one of Buffett’s favourite phrases – ‘durable competitive advantage’. Oh no. It’s thinking more about pure comedy value.

For one thing, there’s a degree of Victor Kiam-esque wonderfulness about a billionaire who famously loves nothing better than a good hamburger going out and buying his favourite ketchup brand.

But First Round’s favourite bit of the whole story emerged in the subsequent press conference. Heinz’s chairman, president, chief executive, commander-in-chief and Supreme Leader* William Johnson revealed that when the 3G Capital team first asked for a meeting, he assumed they wanted to complain – since in their capacity as owners of Burger King (which 3G bought in 2010), they’re one of his biggest ketchup customers. 

But rather than whingeing about under-powered ketchup sachets – a very real First World problem, First Round is sure you’ll agree – they instead offered to buy his entire company (presumably making him considerably richer in the process). “Turns out they were a very happy customer,” the Heinz boss said, in admirably understated fashion. 

Let’s hope he was joking. After all, First Round is clearly no stranger to serious lapses of professional judgement (wearing that Borat costume to the office last Halloween was definitely a mistake, in hindsight). But this little anecdote doesn’t exactly suggest that Johnson has his finger on the pulse of his biggest customers. 

Then again, given that he’s just managed to sell his company to one of the world’s richest men at a 20 percent premium to its previous share price, it seems unlikely that his shareholders will hold it against him for long. 

* two of these may be made-up