| Tue 30 Nov 2010, 7:30 | | FBR - Famous Brands Limited - Famous Brands` festive season cheer with |
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FBR
FBR
FBR - Famous Brands Limited - Famous Brands` festive season cheer with
acquisition of O`Hagan`s Irish Pub and Grill
Famous Brands Limited
(Incorporated in the Republic of South Africa)
Registration number: 1969/004875/06
Share Code: FBR
ISIN: ZAE000053328
("Famous Brands")
FAMOUS BRANDS` FESTIVE SEASON CHEER WITH ACQUISITION OF O`HAGAN`S IRISH PUB
AND GRILL
Famous Brands has acquired the franchise agreements, trademarks and
intellectual property of the O`Hagan`s Irish Pub and Grill brand from
O`Hagan`s Franchising (Pty) Ltd for an undisclosed sum. The purchase
consideration is less than 0,5% of Famous Brands` market capitalisation. The
acquisition will be funded through existing cash reserves, and will be
earnings enhancing.
Assuming successful conclusion of the due diligence exercise, the effective
date of the transaction is 01 December 2010.
Currently the O`Hagan`s franchised network consists of 26 outlets, 22 in
South Africa, one in Botswana, one in Zambia and two in Zimbabwe.
Famous Brands CEO, Kevin Hedderwick says, "Having recently entered the Pub
and Restaurant category via our acquisition of the KEG and McGinty`s brands,
the acquisition of O`Hagan`s provides us with an opportunity to literally
double the size of our existing network in this industry, at a compelling
price."
"To open another 26 franchised pubs would conservatively take the Group about
five years, whereas with this prudent investment that is immediately
achieved."
He notes, "This transaction aligns itself with our recently expanded leisure
landscape but also cements our deliberate strategy to play a leading role
within those categories in which we compete. This acquisition demonstrates
our intent to be a serious player in the Pub and Restaurant market."
Hedderwick elaborates on the rationale for the acquisition, "We have already
put in place a Pub and Restaurant Division specifically designed to expand
its capacity as opportunities arise, so the cost of take-on of this
additional business to the division is minimal. Given existing surplus
capacity, we will increase our Pub and Restaurant division`s turnover by 50%,
but nearly double the operating profit."*
Also key to this acquisition are the synergies and benefits to be extracted
from integrating O`Hagan`s into the Group`s comprehensive business model.
The business of O`Hagan`s Franchising was acquired in 1999 by entrepreneur
John Weir-Smith.
Weir-Smith says, "Famous Brands is in a position to take the O`Hagan`s brand
to the next level. They will rejuvenate these businesses and give them the
ability to grow and improve their profitability."
Hedderwick comments, "Our acquisition of the O`Hagan`s brand further endorses
our confidence in the Pub and Restaurant category`s potential and our ability
to shape the future of this business in South Africa. The Group will be
launching a new brand identity and positioning for KEG and McGinty`s in March
2011. Similarly, the positioning of the O`Hagan`s brand will be robustly
unpacked and interrogated early in the new year. We are not only confident
that this acquisition will have an important benefit on revenue for Famous
Brands, but is also part of our longer term ambition for the category per se,
which plans will be announced in due course," he says.
Hedderwick concludes, "Our strong balance sheet, proven brand stewardship
model and depth of management expertise augurs well for the rapid integration
of O`Hagan`s into the Famous Brands business."
*The forecast information contained in the announcement has not been reviewed
or reported on by Famous Brands` auditors.
Notes to editors:
The Group`s brand portfolio includes Steers (524), Wimpy including UK (642),
Debonairs Pizza (315), FishAways (112), Mugg & Bean (108), tashas (5), House
of Coffees (19), Brazilian/Brazilian Cafe (48), Blacksteer (12), Giramundo
(4), KEG (27), McGinty`s (5) and Vovo Telo (3). The Group also manufactures
and supplies its franchisees and the retail trade with a wide range of meat,
sauce, bakery, ice cream, fruit juice and mineral water products.
For further information:
Kevin Hedderwick Del-Maree English
Chief Executive Officer Investor Communications
Famous Brands Mobile: 083 395 8608
Telephone: 011 651 5812
Famous Brands` website: www.famousbrands.co.za
Midrand
30 November 2010
Sponsor
Standard Bank
Date: 30/11/2010 07:30:01 Produced by the JSE SENS Department.
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