After months of searching for a suitable buyer and a revised agreement with the purchasing group, Diageo PLC has finalized the deal to sell Burger King Corporation to a consortium made up of Texas Pacific Group, Bain Capital Partners, and Goldman Sachs Capital Partners.

The final purchase price was $1.5 billion, down by almost a third from the $2.26 billion price orginally agreed upon on July 25, 2002. Texas Pacific Group proposed the revisions to Diageo in November when it became apparent that market conditions would not support the price. The highly competitive quick serve market and a deterioration in capital markets influenced the change in purchase price.

The purchase will be made up of $1.2 billion in cash, $86 million in assumed debt, and $212.5 million in subordinated debt. The purchase stipulates that Diageo insure that Burger King has at least $65 million in cash at the time of completion.

The new Burger King group will have $750 million in senior loans, gauranteed by Diageo to insure timely completion. Another $425 million in subordinated debt will be divided equally by Diageo and the buying group. In addition, Diageo will extend Burger King a $100 million revolving credit facility.

Diageo began to shop Burger King as part of focusing on its core liquor business. Paul Walsh, CEO of Diageo said, “We are please that we have been able to reach this agreement despite a difficult market and at a time of tough trading conditions for the quick serve restaurant sector. We continued to review our options but concluded that this transaction with this buying group was the most certain route to achieving separation.”

Burger King Chairman, CEO, and President John Dasburg said he and the executive management team fully support the sale. “The change in the financial terms, from the initial announcement in July, will reduce the company’s debt burden and strengthen its capital structure,” Dasburg said of the new deal.

The National Franchisee Association, the Burger King franchisee organization said it views the separation from Diageo as critical for the future success of the brand. NFA Chairman Julian Josephsen said the NFA strongly supports the new ownership group led by Texas Pacific.

Diageo said that all regulatory approvals have already been obtained. The deal should be closed sometime today upon receiving cash payment.