ASX-listed Taco Bell and KFC franchisee Restaurant Brands is headed to the US mainland, announcing it will acquire 70 new outlets in Southern California.
The monster new deal, which comprises 59 KFC stores and 11 Taco Bell restaurants, is worth $US73m ($105.6m) and is subject to approval from head franchisor YUM! Brands and the landlord.
Russel Creedy, Restaurant Brands’ group CEO, said the acquisition presented “immediate critical mass” for US stores, with the potential for future North American expansion. Additionally, Creedy confirmed that all 1100 part-time and 500 full-time staff employed by the current franchisee would retain their jobs.
“This acquisition brings with it some experienced and committed employees who we welcome to the Restaurant Brands family and we look forward to building the business further with them in what is a market with considerable potential for future growth,” he said.
Restaurant Brands acquires KFC franchisee stores
The new acquisition significantly boosts Restaurant Brands’ global footprint, which already encompasses Australia, New Zealand and Hawaii.
Domestically, the company has been steadily bolstering its New South Wales growth, launching the first two Taco Bell outlets for the region in December. However, it’s the latest Southern Californian growth that has company chairman José Parés excited.
“We are delighted to take the next step in Restaurant Brands’ growth strategy,” he said. “This acquisition provides us with a solid beach head in the US with significant opportunities for further development.”
Parés became chairman in April, when Mexican investor Finaccess Capital assumed a controlling stake in the company, outlining international growth as a key goal moving forward.
On Monday, Parés went on to reveal that the acquisition would be fully debt-funded, with the company currently completing a refinancing exercise to, amongst other things, add extra capacity to its borrowing facilities.
At present, the US Taco Bell and KFC franchisee owned stores generate an annual turnover of US$95 million and a 12-month trailing store EBITDA in excess of US$12 million.
Settlement is expected to be completed by March 2020.
This story first appeared on sister site, Inside Franchise Business.