The Di Bella coffee group is being swallowed up by Retail Food Group (RFG), owner of the Gloria Jean’s cafe chain.
The deal was announced at RFG’s annual general meeting for shareholders on Tuesday and comes a month after the company bought Gloria Jean’s.
Tony Alford, MD and CEO of RFG, said the company would pay an initial $30 million for Di Bella.
An extra $17 million is payable upon achievement of certain milestones during the next three financial years.
“(Di Bella) complements and extends the company’s existing market penetration by providing the group with a reputable specialist coffee brand well known within wholesale and retail coffee channels,” he told shareholders at Tuesday’s annual general meeting.
“Di Bella Coffee and Gloria Jean’s Coffees Group will be simultaneously integrated into RFG by a dedicated alignment and integration team.”
Di Bella Coffee MD, Phillip Di Bella, will join RFG on a full time basis, overseeing the Di Bella Coffee business and will also undertake a new role within RFG’s Coffee and Beverage Management (CBM) division.
During the AGM, the company’s executives were asked if they were interested in taking over Pie Face, which has just entered voluntary administration.
They said they had no interest in Pie Face.
Alford said the group was confident of meeting its target of a 18.5 per cent lift in underlying net profit to $43.7 million for this financial year.
And if the Gloria Jean’s acquisition is settled on schedule, the group expects underlying net profit will be $50 million, up 36 per cent on 2013/14.
Retail Food Group’s net profit for 2013/14 was a record $36.89 million.
Earlier this month, RFG’s proposed deal to acquire restaurant chain, La Porchetta, was terminated.
The food franchise operator announced in August its intentions to take over the 70 outlet casual dining chain as well as mobile coffee franchise, Cafe2U, and its 236 outlets for a combined total of $31 million.
Alford said it was regrettable the group had to terminate plans earlier this month to buy the Italian food franchise after its due diligence investigations.
Talks between the two companies are continuing.
“RFG continues to engage with the La Porchetta vendors regarding those matters identified during the due diligence process, and in circumstances where a transaction is ultimately enlivened, the market will be immediately informed,” he said.
RFG owns chains Cafe2U, Donut King, Brumby’s Bakery, Pizza Capers Gourmet Kitchen, and Crust Gourmet Pizza.
AAP
