Famous Brands Buys Mugg & Bean
Famous Brands Limited (FBR) is Africa’s leading quick service restaurant and casual dining franchiser and is also represented in the United Kingdom. This group has a global footprint of 1,602 franchised restaurants spread across South Africa, 17 other African countries and the UK. Its brand portfolio includes Steers, Wimpy, Debonairs Pizza, FishAways, House of Coffees, Brazilian Cafe and Tashas.
Famous Brands has bought the South African and African business of coffee-house Mugg & Bean for a cash consideration of R104 million, it said today. The effective date of the acquisition will be 1 September 2009. The result of the acquisition will translate into Famous Brands’ gearing level increasing to 56%. Famous Brands is comfortable with this debt level given it’s strongly cash generative operations. The effective date of the transaction is 1 September 2009, Subject to suspensive conditions which Famous Brands is confident will be met. There are no profit warranties in place.
In a statement Famous Brands chief operating officer Kevin Hedderwick said his groups plan had always been to acquire and grow franchised brands. The Mugg & Bean franchise started in 1996, with the opening of the first restaurant in the V&A Waterfront in Cape Town. It has grown to 96 restaurants nationwide, all of which are franchised. Although coffee-themed, Mugg & Bean is perceived to be a restaurant rather than a coffee shop, and has achieved remarkable success in South Africa by fulfilling the growing need for premium fast-casual dining. Its patrons are typically shoppers and business people during the week and families on weekends.
Ben Filmalter, founder and CEO of Mugg & Bean, said: We are delighted to pass the torch to Famous Brands, whom we are confident will ensure that the concept is further developed. Famous Brands said the acquisition had translated into its gearing level increasing to 56%.
Famous Brands is comfortable with this debt level given it’s strongly cash generative operations.The effective date of the transaction is 1 September 2009 subject to suspensive conditions which Famous Brands is confident will be met,the company said. Ben Filmalter would remain part of the management team for a three-month period to ensure a smooth hand over and integration of the business into Famous Brands. The company said it was its intention to retain the existing management and staff of Mugg & Bean, who were considered vital in terms of ensuring operational continuity of the business.