New Zealand operator buys Australian KFC outlet
by Leon Gettler
New Zealand’s listed fast food operator Restaurant Brands has bought the largest Kentucky Fried Chicken outlet in New South Wales, QSR, for $82.4 million.
Restaurant Brands is no small operator. It runs the KFC, Pizza Hut, and Carl’s Jr in New Zealand.
Shares in Restaurant Brands surged 10 per cent on the news.
QSR has 42 stores and generates annual sales of $100 million and earnings before interest, tax, depreciation and amortisation of $15 million.
QSR is associated with the Copulos Group.
Restaurant Brands chief executive Russel Creedy says QSR offers a high quality portfolio of stores located in strategic urban locations in Sydney and wider New South Wales.
“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,” Restaurant Brands chief executive Russel Creedy said.
“We see the acquisition as an opportunity to expand RBD’s geographical footprint of KFC stores in a market with considerable further expansion opportunities.”
The deal is dependent on a number of conditions.
It requires approval from franchisor Yum! Restaurants International.
Restaurant Brands expects the transaction to be settled by the end of April.
It will be settled through a mix of debt and an issue of five million shares in Restaurant Brands at $NZ4.16 each.
The earnings from the transaction are expected to flow through to Restaurant Brands' bottom-line in the second half of current financial ending in 2017.
Restaurant Brands expects the expanded operation will generate annual revenue of $NZ500 million ($457.62m) and EBITDA of $NZ70m and it expects to have total debt of $NZ82m once the deal is completed.
QSR's Stephen Copulos will receive 5 million Restaurant Brands shares, will be invited to join the board of Restaurant Brands.
Copulos told Fairfax Media that QSR will continue to be run by its current management team. He says his level of involvement will not change.
7th March 2016
