- Release Date: 04/03/16 08:30
- Summary: GENERAL: RBD: Restaurant Brands Acquires KFC Business in Australia
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RBD 04/03/2016 08:30 GENERAL PRICE SENSITIVE REL: 0830 HRS Restaurant Brands New Zealand Limited GENERAL: RBD: Restaurant Brands Acquires KFC Business in Australia 3 March 2016 NZX Restaurant Brands Acquires KFC Business in Australia Key Points o Restaurant Brands NZ Limited ("RBD") is to acquire 100% of the shares in QSR Pty Limited, the largest KFC franchisee in New South Wales Australia, for $A82.4 million. o QSR Pty Limited is a well-established and profitable operator with 42 stores, generating sales in excess of $A100 million and store EBITDA of over $A15 million per annum. o The transaction is expected to be EPS accretive for RBD in FY17. o The acquisition will be partially settled with Restaurant Brands New Zealand Limited scrip of 5 million ordinary shares. The balance will be funded through debt. o Settlement is expected to be completed by the end of April 2016, following which the principal of the vendor, Mr Stephen Copulos will be invited to join the Restaurant Brands New Zealand Limited board. Overview Restaurant Brands New Zealand Limited ("RBD") today announced it has entered into a conditional agreement to purchase 100% of shares in QSR Pty Limited ("QSR"), an Australian company which owns and operates 42 KFC stores in New South Wales, Australia. QSR is currently owned by interests associated with the Copulos Group. The transaction is subject to a number of conditions, including approval from the franchisor, Yum! Restaurants International and other conditions which are customary for a transaction of this nature. RBD expects the transaction to settle by the end of April 2016, although the actual settlement date will depend on when the agreement becomes unconditional. RBD Chairman Ted van Arkel believes the transaction represents a strategic growth opportunity for RBD. "The acquisition is an opportunity for Restaurant Brands to gain a scale position in the New South Wales quick service restaurant market, leveraging our strong relationship with Yum! Restaurants International and successful track record owning and operating KFC stores". QSR's KFC stores are located in urban Sydney and New South Wales regional locations. QSR has been a KFC franchisee for the past 17 years and is the largest KFC franchise in New South Wales (by number of stores). The business has been consistently profitable and QSR is considered to be a very competent operator, winning the Yum! Franchisee of the Year Award for New South Wales for the 2015 year. QSR is currently generating sales in excess of $A100 million per annum and store EBITDA in excess of $A15 million per annum. RBD Chief Executive Russel Creedy said "the acquisition comprises of a high quality portfolio of stores located in a number of strategic urban locations in Sydney and the wider New South Wales. We see the acquisition as an opportunity to expand RBD's geographical footprint of KFC stores in a market with considerable further expansion opportunities." Consideration The transaction is for a total consideration of $A82.4 million, on a cash free basis and including debt repayment, and subject to net working capital adjustments. The transaction will be settled through a combination of scrip and cash: o RBD will issue five million new ordinary shares to Copulos Group interests as part of the settlement. The shares will be issued at $NZ4.16 per share, being the volume weighted average trading price (VWAP) over the 10 days prior to this announcement. No discount has been applied in determining the issue price. The shares, which will represent 4.86% of RBD's total share capital after being issued, will be subject to a 12 month escrow term during which they cannot be sold (subject to certain limited exceptions) o The balance of the settlement price of approximately $A62 million will be funded by debt through new facilities. Post transaction, RBD is expected to have total debt outstanding of approximately $NZ82 million. Mr Stephen Copulos has been invited to join the RBD board following settlement. Mr Copulos has had considerable experience in the KFC business in Australia for a number of years and is expected to bring a level of expertise and understanding of the Australian KFC market to the board. The Chairman of RBD said "we are pleased to have agreed a mix of consideration with Stephen Copulos which incorporates the issue of shares to align our interests in growing the Australian KFC portfolio. With a long standing presence in the Australian quick service restaurant industry we believe Stephen will provide a unique level of expertise and understanding of the Australian market to grow." Impact on RBD The benefits of the acquisition are expected to flow through from the second quarter of the FY17 year, and it is anticipated that the transaction will be EPS accretive from the outset. As part of integrating QSR into RBD, the future of two underperforming QSR stores will be reviewed. RBD has incurred one off (non-trading) transaction costs of approximately $NZ1 million which is expected to impact the FY16 year end results. There will also be stamp duty and other charges on settlement that will similarly impact the FY17 result. Following the acquisition and allowing for corporate costs for the QSR business, RBD is expected to generate annual turnover in excess of $NZ500 million and EBITDA of $NZ70 million (assuming a NZD/AUD exchange rate of 0.93). For further information please contact Russel Creedy Grant Ellis CEO CFO/Company Secretary Phone: 525 8710 Phone: 525 8710 ENDS End CA:00278770 For:RBD Type:GENERAL Time:2016-03-04 08:30:01
Ann: GENERAL: RBD: Restaurant Brands Acquires KFC Business in Australia
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