Famous Brands double "rest of Africa footprint" with acquistion of 49% stake in leading Nigerian brand, Mr Bigg's

Famous Brands, the leading quick service and casual dining restaurant franchisor in Africa, has successfully reached an agreement with UAC of Nigeria PLC (UAC), a leading diversified conglomerate with operations in foods, paints, logistics and real estate, to acquire a 49% stake in their hitherto wholly-owned company UAC Restaurants Limited (UACR). UACR manages the Quick Service Restaurant (QSR) component of UAC’s business and houses the flagship Mr Bigg’s brand, the single largest food franchise brand in Africa, north of the South African border. The acquisition consideration has not been disclosed, and will be funded out of cash reserves. This transaction falls below the threshold of a categorised transaction in terms of the Listings Requirements of the JSE Limited (“JSE”). The deal is effective as of 01 October 2013. UACR comprises 165 franchised restaurants across Nigeria, 57 of which are in Lagos and 14 in Abuja. 45% of the company’s franchised restaurants and 40% of its revenues are concentrated in Nigeria’s three key commercial centres. UACR also has a small logistics and manufacturing component. Famous Brands Chief Executive, Kevin Hedderwick comments, “We are enormously excited about this transaction, which boosts the Group’s strategy to expand its presence in the broader African QSR market. Famous Brands has operated in African countries north of South Africa’s borders for 15 years and we have a good grasp of doing business in those territories; prudent expansion in a select range of key markets in the region has always been part of our programme.” “Whilst we have traded in Nigeria for the past 11 years through a combination of Master License and Franchise Agreements, this transaction catapults us to a completely different level, enabling us to meaningfully expand our presence in this burgeoning, currently low consumption per capita organised food service market. It also underlines our ambitious and deliberate plans to grow our business outside of South Africa. Trading in Africa is inevitably about being ‘first to market’ and we believe that this transaction represents a significant step change through which we will further entrench our leadership position within the branded food service industry in Africa.” “This joint venture delivers compelling benefits for both parties: UACR will be vending in a formidable brand (Mr Bigg’s), local expertise and existing franchisees, as well as a nationwide distribution network and Lagos-based manufacturing infrastructure. In exchange, Famous Brands will add value to the business through our expertise in managing intellectual property, growing brands and optimising supply chain operations and efficiencies,” Hedderwick says. Notably, Mr Bigg’s has an extensive on-the-ground presence and huge loyal customer base demonstrated by the 100,000 consumers who visit the brand’s restaurants daily. Mr Bigg’s trading format consists of quick service restaurants situated on high foot-fall sites, and its extensive product offering ranges from pastries and other snacks to burgers and hot meals. About 25,000 pieces of chicken are sold in Mr Bigg’s restaurants daily while some 635,000,000 meat pies have been sold by the brand since its inception. Hedderwick states, “Historically, one of the key challenges of expanding into the rest of Africa has been to source suitable local partners. This acquisition surmounts that obstacle and enables us to not only acquire a substantial stake in an existing leading home-grown brand in Nigeria with opportunities to unlock value in that market, but also to export the format to other markets. We foresee our operations in the rest of Africa becoming increasingly significant to the Group over time.” Larry Ettah, UAC Group Managing Director and CEO, says, “We are delighted to partner with Famous Brands in this venture. This is a transformative transaction which ensures UACR has the necessary strategic partnership to unlock the considerable value potential in the QSR landscape which Mr Bigg’s defined 25 years ago and in which it still maintains a leading position. UACR will be availed of Famous Brands’ tested and highly successful brand stewardship to enhance and reinforce the Mr Bigg’s brand franchise market power. This deal further reinforces UACN’s commitment to ensure we collaborate and leverage international partnerships to accelerate our strategic growth and progress.” “Nigeria is an attractive destination for QSRs and the country has seen an influx of international brands recently. Future consumer expenditure is underpinned by a range of key drivers, including higher monthly income levels resulting from GDP expansion, an increase in the minimum wage (from N7500 to N18000), and a shift in social class demographics, with the middle class (the business’s core target market) expected to increase to 35% of the population in 2015 compared to 30% in 2009. Significantly, this middle class comprises a large, young population with an average age of 18.” Ettah identifies that “Nigeria’s other investment incentives include an increasingly supportive business environment resulting from continued political and macro-economic stability coupled with growth positive policies and initiatives. In addition, the country continues to experience an improvement in efficiency, particularly in the distribution and manufacturing sectors. This is attracting positive interest from foreign investors with a long term view of the opportunities.” Hedderwick concludes, “Our immediate goal is to bed down this joint venture and optimise on the evident success of the existing operation and its enormous potential within the Nigerian market.”     Notes to editors:
Famous Brands is represented by the following brands in the rest of Africa*: Steers (43), Wimpy (29), Debonairs Pizza (60), Mugg & Bean (8), FishAways (9), Milky Lane (16), Juicy Lucy (1), O’Hagan’s (3), Keg (1), Europa (1) and Fego Caffe (1). Famous Brands’ network in the rest of Africa totals 172 restaurants comprising*: Botswana (28), DRC (3), Ivory Coast (4), Kenya (13), Malawi (4), Mauritius (28), Mozambique (2), Namibia (30), Nigeria (7), Sudan (5), Swaziland (8), Tanzania (3), UAE (3), Zambia (26) and Zimbabwe (8). *as at February 2013 Famous Brands – You’re in good company UAC of Nigeria PLC (UAC), a diversified company has for over a century played a prominent role in the development of Nigeria. UAC’s growth strategy consists in building strong partnerships with leading regional and international corporations to drive effective business transformation and deliver sustainable growth. UAC operates through the following subsidiaries:-
  • Grand Cereals Limited manufactures and markets Grand Edible Oils, Vital Poultry/Fish Feeds and Grand Maize Meals.
  • UAC Foods Limited, a joint venture business with Tiger Brands Limited of South Africa, offers the award winning Gala Sausage Roll, Funtime Coconut Chips, Supreme Ice Cream, Delite Fruit Juice, Swan Bottled Spring Water and drinks and baked maize snacks.
  • UAC Restaurants Limited manages the network of Quick Service Restaurants across Nigeria under the market leading Mr Bigg’s brand.
  • MDS Logistics Plc, a joint venture with Imperial Logistics of South Africa, is the leading integrated supply chain solutions provider in Nigeria with a number of distribution centres across Nigeria.
  • UACN Property Development Company Plc (UPDC) is a foremost property development and management company quoted on the Nigerian Stock Exchange.
  • CAP Plc, the Akzonobel technical licensee of Dulux, is the leading decorative paint producer in Nigeria.
  • Livestock Feeds Plc is an animal feeds operations with mills in key sites across the country.
  • Portland Paints and Products Nigeria PLC is a leading paint manufacturer in Nigeria with a strong brand, broad product range and nationwide distribution network.
For more information visit www.uacnplc.com UAC … doing good
For further information:
Kevin Hedderwick Chief Executive Officer Famous Brands Ltd Telephone: 011 651 5812 UACN PLC Abdul Bello (Chief Financial Officer) abello@uacnplc.com Bamidele Adewole (Investor Relations) badewole@uacnplc.com Telephone: 011 651 5812 Investment Bank and Sponsor Del-Maree English Investor Communications Mobile: 083 395 8608 Telephone: 011 651 5812 AP (Investor Relations Advisers) Nick Chambers (africapractice) +234 813 574 3544 Molade Omotoso (africapractice) +234 802 384 8532 Telephone: 011 651 5812 The Standard Bank of South Africa Limited