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FBR
FBR
Famous Brands - Voluntary announcement of the acquisition of Coffee Contact
Famous Brands Limited
(Incorporated in the Republic of South Africa)
(Registration number 1969/004875/06)
Share code: FBR & ISIN code: ZAE000053328
("Famous Brands" or "the group")
Voluntary announcement of the acquisition of coffee contact (Pty) limited
("Coffee Contact")
1. INTRODUCTION
Shareholders are advised that Famous Brands ("FBR") has acquired a premium
coffee beans sourced globally for the restaurant and hospitality trade in
Gauteng. Product is marketed under the Cafe Maestro brand. The company also
has the distribution rights for Tonino Lamborghini Cafe in South Africa.
2. DETAILS OF THE ACQUISITION
2.1 NATURE OF THE BUSINESS OF COFFEE CONTACT
Coffee Contact is a private company, co-owned by Master Blender, Gerry Parginos,
and Charalambos Halamandaris. Parginos started the business three years ago.
He has extensive experience in the coffee industry, having been one of the
driving forces behind the original House of Coffee"s roasting business founded
in 1965, which was subsequently sold to AVI.
2.2 RATIONALE FOR THE ACQUISITION
Cafe Society culture is rapidly taking root in this country and Famous Brands"
management is enthusiastic about the potential for growth in this sector. In
addition to the obvious synergies between the companies, Parginos"s coffee
knowledge is unsurpassed in the South African coffee landscape, and importantly,
Coffee Contact offers compelling prospects.
The rationale for this acquisition is twofold. Coffee Contact"s products are
currently only listed with independent restaurants and coffee shops, however,
through the group"s catering and retail services divisions, this transaction
will enable Famous Brands to grow Cafe Maestro"s current limited Gauteng
exposure to the hospitality industry nationwide. It will also afford
introduction of the product into the retail sector. Secondly, the group will
explore opportunities to vend the product into its own franchise brands, which
would have significant impact on the business"s current revenue.
Ambitions for Coffee Contact will be implemented in a phased approach. In the
short term the objective is to expand the business nationally, thereby boosting
Famous Brands" retail and hospitality offering, and in the medium term the
intention is to investigate opportunities to supply coffee to the group"s
franchise brands.
Coffee Contact was recently awarded the contract to supply coffee on all
outgoing and incoming international SAA flights.
2.3 TERMS OF THE ACQUISITION
Famous Brands will acquire 70% of the shares and claims in Coffee Contact. The
acquisition price is not material, and will be settled by a combination of cash
and the issue of FBR shares at R12.50 per share. The earnings of the acquisition
will not have a significant impact on the results of the group.
Management have signed two year service agreements, incorporating restraint of
trade undertakings.
Post-acquisition, the business which employs 17 staff will continue to operate
from its facilities in Meadowdale, Johannesburg.
The deal is effective from 1 December 2006 and is subject to certain conditions
precedent, including a due diligence exercise.
Midrand
4 December 2006
Sponsor
Java Capital (Proprietary) Limited
Date: 04/12/2006 11:15:28 AM Produced by the JSE SENS Department
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