The owners of award-winning Sunshine Coast family pie shop chain Beefy's have signed a deal to sell the company to Gold Coast-based Retail Food Group (ASX: RFG), whose franchise brands include Donut King, Gloria Jean’s, Brumby’s Bakery, Michel’s Patisserie, Pizza Capers, Crust Gourmet Pizza and Di Bella Coffee.
The $10 million deal includes a $5.5 million upfront cash payment to Beefy's owners the Hobbs family, as well as $2 million worth of RFG shares and deferred payments of $2.5 million over the 12 months post-completion.
Beefy's is expected to generate revenue of approximately $18 million and EBITDA of $2.5 million in FY24 on a pro forma basis, following 12 per cent sales growth in the September quarter.
"We’re proud of what we have achieved as a family-owned business since opening our first store in 1997," says Beefy’s CEO Mark Hobbs.
"Beefy’s is now a much-loved Australian brand, has nine strongly performing stores and a manufacturing facility on the Sunshine Coast, and employs 200 people.
"Joining the RFG network will help Beefy’s take the next step in its growth journey as we will become part of a team with many decades of retail experience, as well as benefit from being in a group with a larger balance sheet and access to support functions."
RFG plans to consolidate Beefy's operations over six months, and has highlighted new outlet expansion opportunities with a "strong brand, regular and consistent customer feedback requesting more outlets, and minimal complexity in food retail requirements meaning many locations are potentially suitable".
"RFG is pleased to be in a position where it can look for inorganic growth opportunities," says RFG's relatively new CEO Matthew Marshall.
"The acquisition of Beefy’s is significant not only because it is a great business that is complementary to our existing brand portfolio but because it marks the beginning of RFG’s next phase of growth.
"We look forward to working with the Hobbs family and all Beefy’s employees to ensure their pies can be enjoyed by more and more Australians."
RFG has also announced an extension of its senior debt arrangements by $20 million with Washington H. Soul Pattinson and Company (ASX: SOL). The new facility will initially be partially drawn by $5 million, with the remainder available for future growth opportunities and working capital.
At the time of publication, RFG shares are up by 7.14 per cent this morning at 6 cents per share (cps).
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