VIL
25/11/2014 11:29
ASSET
PRICE SENSITIVE
REL: 1129 HRS Veritas Investments Limited
ASSET: VIL: Purchase of Better Bar Company approved
Media and NZX release
25 November 2014
VERITAS' PURCHASE OF BETTER BAR COMPANY APPROVED
Shareholders strongly support game-changing acquisition
Veritas Investments Limited (NZX:VIL) today confirmed strong shareholder
support for its fourth acquisition in 18 months, with approval to purchase
The Better Bar Company (BBC) group of hospitality outlets for $31.2 million.
This is expected to make Veritas a $90 million a year revenue group.
The meeting also approved the appointment of BBC Chairman Richard Sigley to
the board of Veritas, subject to completion of the BBC acquisition.
The Board also advised shareholders that John Moore will join the Veritas
board on 1 December 2014 replacing Stefan Preston who did not seek
re-election due to other business commitments.
Veritas Chairman Mark Darrow told the meeting of shareholders that the BBC
acquisition represented an "excellent opportunity to pick up one of the best
hospitality groups in New Zealand".
"The hospitality industry in New Zealand, to March this year, had its
strongest growth in six years with 2013 total revenues at $7.6 billion, up
some 10 per cent on the previous year.
"With a limited number of larger hospitality groups in New Zealand, the board
views the acquisition of BBC as a significant and transformational next step
in its investment strategy in the food and beverage sector," Mr Darrow said.
He told the meeting the acquisition would leverage off Veritas' existing
areas of strength and expertise and diversify risk within the group's
investment portfolio. There were further opportunities to expand BBC's
operations in New Zealand.
"The BBC opportunity is a game changer for Veritas and the board believes it
will add significant scale and diversification to Veritas' current business.
We expect the acquisition to increase investor interest in Veritas and the
board will also benefit from the addition of an experienced director in
Richard Sigley.
"Furthermore, we have supportive vendors prepared to take significant
shareholdings in Veritas."
Mr Darrow says Richard Sigley brings wide hospitality industry experience to
the Veritas board having been in the industry for 20 years.
"Richard is the current CEO of the Nourish Group and held several senior
management roles at DB Breweries. He has worked in the retail wine and
spirits sector and in advertising. He's also an elected board member of the
Hospitality Association of New Zealand."
Mr Darrow also said new director John Moore will be an exceptional additon to
the Board. He is an experienced investment banker and corporate adviser who
has worked both in New Zealand and internationally. John was Head of Equity
Capital Markets for Craigs Investment Partners, and more recently has
established NZX sponsor firm, Miro Capital.
At the meeting the Veritas board confirmed its intention to maintain its
policy of paying between 60 and 70 per cent of net profit after tax in
dividends .
Mr Darrow said that the combined group's goal is to leverage its scale and
broad capability and to enhance revenue and margin improvement.
"In the food, beverage and franchise sectors our intention is to expand the
existing BBC business utilising Veritas' scale and infrastructure and
leverage group buying power and management expertise across all businesses."
The BBC deal involves Veritas Investments' subsidiary Veritas Holdings
Limited paying $23.4 million in cash and issuing 6,964,286 new Veritas shares
to the certain BBC vendors. This results in the BBC vendors and their
associates holding 15.718 per cent of Veritas' total shares immediately
following completion.
In addition, Veritas is assuming approximately $6 million of the BBC Group's
net debt. $3 million dollars in cash has been held back as a "retention
amount" to deal with any purchase price adjustments and warranties.
NOTE: Veritas' revenue for the financial year ending 30 June 2014 was $29.972
million producing a net profit after tax of $4.353 million. Directors predict
revenues of between $71 million and $78 million for the year ending 30 June
2015 including the new BBC acquistion for 7 months of that financial year.
About BBC Group
The BBC Group is a significant operator of gastro bars in New Zealand,
including the newly refurbished and reopened gastro bar "The Cav" in
Auckland. It also operates two well-established iconic Irish pubs in
Auckland's Viaduct, O'Hagans and Danny Doolans and The Doolan Brothers chain
of neighbourhood Irish bars and eating establishments in various suburbs
around Auckland and Hamilton. The BBC Group also operates two new
establishments in Hamilton, The Good Home and Honky Tonk. It has enjoyed
strong periods of growth and profitability driven by a management team with a
proven track record of developing and sustaining great, long lasting concepts
within the hospitality sector. www.thebbc.co.nz
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. On 25 November 2014 Veritas
shareholders approved the purchase of The Better Bar Company group business.
www.veritasinvestments.co.nz
Issued for Veritas Investments Limited by Pead PR
Contacts:
Candice Robertson, Pead PR, Tel: +64 9 918 5576, Mob: +64 21 075 7911, email:
[email protected]
Mark Darrow, Chairman, Veritas Investments, +64 21 88 88 58
End CA:00258062 For:VIL Type:ASSET Time:2014-11-25 11:29:48
