Collins Foods Limited, KFC and Sizzler restaurant operator, has struck a deal to buy 13 KFC restaurants around the NSW and Victorian border.
The acquisition is valued for $25.46 million plus acquisition costs, including $10 million in Collins Foods shares.
Company CEO Graham Maxwell said the purchase, which takes the total of outlets owned by the company to 191, strengthens Collins Foods’ position as the largest KFC franchisee in Australia.
The restaurants are being purchased from local companies Chrikim Pty Ltd, Skeeter Wright Pty Ltd and Geoff Wright Corp Pty Ltd.
“We are committed to delivering on our growth strategy, and this acquisition is entirely consistent with how Collins Foods approaches acquisition opportunities to ensure they add value for shareholders,” Maxwell said.
He added that given Collins Foods’ experience operating KFC restaurants in Australia, they expect to be able to drive synergies and margin improvement.
“This acquisition, without factoring any margin improvement or synergies, will be immediately earnings per share accretive and enhance shareholder value,” Maxwell said.
The fastfood restaurant operator bought Competitive Foods’ 42 KFC restaurants in Western Australia and the Northern Territory a few years ago.
Approval from the franchisor has been received subject to customary conditions. Completion is subject to a number of standard conditions precedent and is expected to be achieved by mid-July.
