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Famous Brands announces largest deal in its history

| On the move

Famous Brands’s latest acquisition — and the largest in its history — is UK chain Gourmet Burger Kitchen for £120m (about R2.1bn), the restaurant franchisor said.

The statement ended speculation on the reason for its cautionary announcement on August 12.

The group has announced a string of deals since its former CEO Kevin Hedderwick switched roles to group strategic adviser responsible for merger and acquisition activity in March.

Unlike Famous Brands’ other recent deals — a tomato paste factory in Coega, a chips factory in Lambert’s Bay and Fourways-based restaurant Salsa Mexican Grill — the UK transaction falls under the JSE’s category 2 classification requiring the value to be disclosed.

Famous Brands is already active in the UK via Wimpy. It said Gourmet Burger Kitchen's 75 restaurants in the UK would "add scale ... and up-weight the group’s premium brand portfolio".

"Famous Brands has identified the UK as a strategic growth region in Europe and one that offers the opportunity to earn hard currency outside Africa. The acquisition represents an important step in Famous Brands’ expansion strategy," the company said in its statement.

Gourmet Burger Kitchen recently re-acquired the rights to its Irish franchise network, thereby adding five stores to its portfolio.

Famous Brands is buying 97% of Gourmet Burger Kitchen from Yellowwoods Group and the remaining 3% from management.

"This acquisition will transform the future of Famous Brands. Gourmet Burger Kitchen is a best-in-class business and brand, with growing consumer equity, supported by a phenomenal leadership team. I am confident that the addition of it to our portfolio positions the group optimally to attain its audacious future growth targets," Hedderwick said in the statement.

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