Taste acquires St Elmo's

Johannesburg – Taste Holdings [JSE:TAS] announced on Thursday that its subsidiary, Scooters Pizza, has entered into an agreement with St Elmo's Trading Company, St Elmo's Advertising CC and Halben Foods CC for the acquisition of the franchising, food manufacturing and distribution business.
 
The transaction becomes effective from 1 November 2010, and purchase consideration is R8m, with no outstanding conditions precedent.

Taste said St Elmo's offers a good strategic fit with its existing pizza business, Scooters Pizza.

The acquisition will also add critical mass to the Taste food division, allowing for increased economies of scale across the franchising and manufacturing divisions.
 
The group added that the transaction is in line with the strategic objective of vertically integrating the food division, and is expected to be earnings enhancing to Taste from the first year.

Taste said the unaudited pro forma financial effects of the transaction will be announced in due course. Shareholders are accordingly advised to continue to exercise caution when dealing in the company's securities, it said.