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07/11/2014 08:49
ASSET
REL: 0849 HRS Veritas Investments Limited
ASSET: VIL: Acquisition expected to lift annual revenue to over $90m
7 November 2014
News release
New Veritas acquisition expected to lift annual revenue to over $90 million
Veritas Investments Limited ("Veritas") has entered into a conditional
agreement to purchase the business and assets of The Better Bar Group of
companies ("BBC") as a going concern for $31.2m. This acquisition is
expected to increase Veritas' annual revenue to over $90m on a full-year
basis.
This will be the fourth acquisition for Veritas in just 18 months and follows
the purchase of The Mad Butcher franchisor business in May 2013, a 50 per
cent stake in Kiwi Pacific Foods in December 2013 and the Nosh Food Market
business in September 2014.
BBC is a leading specialty hospitality operator in New Zealand, with 11 sites
located in Auckland and Hamilton, including well known brands such as The
Cav, O'Hagan's, Doolan Brothers and Danny Doolans. Employing around 200
people, BBC is expected to generate revenue of more than $31m per annum.
The acquisition is conditional on Veritas shareholder approval at its annual
meeting to be held later this month. The deal is also conditional on landlord
and key supplier consents, relevant permits and licences being obtained to
ensure the day-to-day operation of the business, as well as key management
staff transferring their employment to Veritas.
Of the $31.2m purchase price, $23.4m (75 per cent) will be paid in cash
funded by a facility of up to $25m with ANZ Bank, and the remaining 25 per
cent through the issue of new Veritas shares.
"This transformational acquisition for Veritas is expected to deliver a
significant uplift in revenue and earnings for the Veritas group." says
chairman Mark Darrow.
"BBC has a strong track record of growth and recent acquisitions have seen
their group go from strength to strength under the direction of the senior
management, who are considered to be amongst the most experienced and
successful hospitality executives in New Zealand."
Subject to shareholders approving the transaction, BBC chairman Richard
Sigley will join the Veritas Board and Geoff Tuttle will remain in his role
as CEO of the BBC business.
"This significant acquisition fits our investment mandate and complements the
existing companies within the Veritas group. We see further opportunities for
procurement synergies between the companies, complemented by listed company
governance and better resources, enabling the businesses to be scaled
significantly over time." Mr Darrow says.
The acquisition is expected to be completed late November 2014.
About Veritas Investments Limited
Veritas Investments is an NZX-listed investment company focusing in the Food
and Beverage sector. The shell company was formed in December 2011 and made
its first acquisition of the Mad Butcher franchisor business in May 2013
through a reverse acquisition transaction. A further investment was made in
December 2013 for 50% of Kiwi Pacific Foods Limited. In September 2014
Veritas acquired the Nosh Food Market business. www.veritasinvestments.co.nz
About The Better Bar Group
The Better Bar Group is New Zealand's leading specialty hospitality operator.
From humble beginnings with a couple of establishments in Auckland's Viaduct,
the group has grown to 11 sites across Auckland and Hamilton. The Better Bar
Group owns and operates the Ponsonby gastro-bar The Cav, Irish gastro-pub
Doolan Brothers, live music venue Danny Doolans, Irish gastro-bar O'Hagan's,
traditional English pub Cock & Bull, western/country bar The Honky Tonk and
Good Home Public house in Hamilton. www.thebbc.co.nz
For further comment, please contact:
Mark Darrow
Chairman, Veritas Investments
+64 21 88 88 58
End CA:00257368 For:VIL Type:ASSET Time:2014-11-07 08:49:47
