JOHANNESBURG - Simbisa Brands, the Zimbabwean franchise operator of Chicken Inn, Nando’s and Steers has acquired South Africa incorporated FoodFund in its expansion bid into new markets.
The company runs quick serve restaurant operations in Zimbabwe and other regional countries such as Mauritius, Ghana, Kenya, Zambia, Namibia and DRC among others.
In the year to December 2016, Simbisa raised revenue from its regional operations by 10percent to $30.2million (R360.5m).
Its acquisition of FoodFund is seen strengthening its growth strategy into new markets in the quick serve restaurant business.
Simbisa announced the acquisition of FoodFund, which is incorporated in South Africa, the United Arab Emirates and British Virgin Islands, via the issuance of shares in the Zimbabwean company. After this acquisition, Simbisa will then list on London’s AIM.
“The negotiated value of the acquisition at the effective date (July 1, 2018) is to be settled via a staggered issuance of Simbisa ordinary shares that are to be listed on AIM,” said the company in a circular to shareholders yesterday.
Additional shares in Simbisa will also be issued for the acquisition process if FoodFund achieves a profit after tax above the earnings target of $9.9m and up to $13.6m for the financial years 2019 to 2021.
The “performance-based earn out shares will be issued after the release of the audited results” of FoodFund for the June 2021 financial year.
FoodFund operates 17 outlets under about eight independent food brands.
It was founded by chairperson Costa Tomazos, who established the first steakhouse outlet under the company in South Africa in the 1970s.
Simbisa has since announced plans to list on London’s AIM to raise funds for the expansion bid. FoodFund has restaurant operations in South Africa, the UK and Europe, while Simbisa Brands is active in Zimbabwe and other regional markets.
“The capital raised through the initial public offering on AIM will be used to fund regional expansion activities through a combination of capital expenditure in existing regional markets and identifying new acquisitions.
"The company’s growth ambitions and the proposed acquisition of FoodFund cannot be completed without access to competitive and sufficient funding as achieved through a secondary listing on AIM,” said the company.