Steers buys Pleasure Foods

Steers buys Pleasure Foods

2003-08-19 13:44

Johannesburg - Fast food franchise chain Steers has acquired Pleasure Foods, which includes the Wimpy and Whistle Stop brands, for R150.6m from existing management and Ethos Private Equity Fund III.

Pleasure Foods recently disposed of its Juicy Lucy and Milky Lane franchises.

Steers said on Tuesday that the acquisition will double the group's existing franchise network, and position it for local and international expansion.

It is expected that the acquisition will close and the price be paid on about December 1, 2003, after the acquisition has become unconditional.

The purchase price will be funded via a combination of cash reserves, and debt- and equity finance.

Pleasure Foods, comprising shareholders Ethos Private Equity Fund (79%) and management (21%), originally acquired the business from Anglo Vaal in 1996 as part of a private equity deal.

The full financial effects of the acquisition will be published in due course, Steers said.

The transaction, together with expansion planned for the current fiscal year, will catapult Steers Holdings' complement of outlets to in excess of 1 000, establishing it as the leading franchisor on the African continent.

The outlets are located nationwide and across a range of African countries.

The full complement of outlets currently comprises 315 Steers, 173 Debonairs Pizza, 29 FishAways, 11 Church's Chicken, 34 House of Coffees, 16 Brazilian, 2 ESP Illy Boutique, 373 Wimpy and 36 Whistle Stops.

The transaction is subject to certain conditions precedent, including a due diligence investigation, regulatory approvals from the JSE Securities Exchange, Competition Commission and shareholders, and the attainment of EBITDA of R30m by Pleasure Foods.