RETAIL Food Group’s (ASX: RFG) thirst for coffee shows no signs of abating as the company announced today it was swallowing Brisbane’s Di Bella Coffee empire for $30 million.

The news comes on the heels of RFG taking a massive plunge into the international coffee market with the announcement last month that it was acquiring Gloria Jeans’ Coffee for up to $180 million.

The move to buy out Brisbane coffee king Phillip Di Bella’s business has taken market observers by surprise with Di Bella – named last week as the Brisbane Business News Young Entrepreneur in Manufacturing, Wholesale and Distribution - showing no signs of a desire in the past to sell the company.

RFG has announced a share purchase agreement for Di Bella Coffee, a specialty roaster with a broad national distribution of products through retail and wholesale markets including hotels and airlines.

Di Bella established the business in 2002 and is understood to have been negotiating with RFG for some time.

He was not available for comment, but a statement says the purchase agreement remains subject to due diligence which is currently under way.

“Di Bella has been built on the vision to provide the ultimate coffee experience, and this vision will be enhanced by leveraging RFG’s scale of operations and significant resources,” Di Bella says in the statement.

“Both Di Bella Coffee and RFG are confident the agreement will proceed and Di Bella Coffee will ultimately form an integral part of RFG’s growing coffee roasting and distribution portfolio.

“Di Bella Coffee is looking forward to potentially aligning business interests with RFG to further enhance the company’s presence and identity in Australia and overseas.

“Di Bella Coffee as both a business and brand will continue to operate as normal under the banner of RFG’s coffee roasting and distribution portfolio.”

RFG says the deal will boost its coffee and roasting business by 30 per cent to about 5.9 million kilograms, including the Gloria Jean’s acquisition.

The deal will add about $6 million to the company’s earnings before interest and tax in FY16.

Senior management at Di Bella will move under the RFG corporate umbrella, including Di Bella who is expected to maintain a hands-on role with the company on a full-time basis.

A spokesman says Di Bella is “very excited for the future of Di Bella Coffee and for his own future”. She says the deal will result in a seamless transition for both customers and staff.

RFG chief executive Tony Alford says Di Bella Coffee “complements and extends the company’s existing market penetration by providing the group with a reputable specialist coffee brand to grow scale amongst each of its coffee and allied beverage distribution channels”.

Alford says Di Bella will continue to “nurture and grow” the business and he is expected to develop an increasingly important role within RFG’s Coffee and Beverage Management division.

The move comes in the wake of one of Di Bella’s major clients, Pie Face, being placed into administration.

The Di Bella acquisition comprises $27.4 million in cash and $2.6 million in RFG shares. RFG’s debt will climb to $210 million following settlement.

Get our daily business news

Sign up to our free email news updates.

Please tick to verify that you are not a robot

The MBA that helped Epic Environmental’s startup employee become GM and partner
Partner Content
Environmental engineer Romin Nejad began his career at Epic Environmental at a challeng...
Queensland University of Technology

Related Stories

Black Friday no "be all and end all" for sales as marketing costs bite

Black Friday no "be all and end all" for sales as marketing costs bite

November is often dubbed the new December of retail sales with Blac...

Techtronic slapped with record $15m fine for resale price maintenance

Techtronic slapped with record $15m fine for resale price maintenance

The Australian arm of Hong Kong-based supplier Techtronic has been ...

7-Eleven Australia acquired for $1.7 billion

7-Eleven Australia acquired for $1.7 billion

Convenience store giant 7-Eleven Australia is set to be sold f...

United Airlines now king of the US route with new service from Brisbane to LA

United Airlines now king of the US route with new service from Brisbane to LA

United Airlines has upped the ante for its services into Australia ...