Famous Brands Buys O’Hagans franchise
Franchise company Famous Brands has almost doubled its exposure to the pub-restaurant sector it only bought into three months ago, with the purchase of 26 O’Hagans pubs from owner John Weir-Smith.
The 26 O’Hagan’s outlets — 22 in South Africa, one in Botswana, one in Zambia and two in Zimbabwe — for which Famous Brands only said it paid “less than 0,5%” of its R4bn-odd market capitalisation, adds to the 32 Keg and McGinty’s operations in the portfolio the company bought in August.
“Whenever we get into a category – we have only just recently entered the pub-restaurant category – we like to in a short space of time make sure we have depth in that category. For us to go and open 5 pub and restaurants a year, at the pace at which we can do that, it would take another five year to get to the same density as we have been able to achieve by this transaction,” Famous Brands CEO Kevin Hedderwick said in an interview earlier today.
Cash-flush Famous Brands, which manages the branding and distribution for a stable of 1824 restaurants including Steers, Wimpy and Debonairs Pizza has been on the acquisition trail this year as prices have come down. While he only started talking with representatives of O’Hagan’s owner John Weir-Smith a month ago, the purchase would have cost about 20% more had he bought it 12 months earlier, Mr Hedderwick said.
Now was also a good time to buy, as the prices of restaurants tend to go up in January and February after the peak holiday — or “harvesting” season, as it is known in the industry — boosts their value slightly, he said.