Collins Foods is accelerating the expansion of its KFC empire.
The Australian company is buying a chain of 16 KFC restaurants in the Netherlands from subsidiaries of Yum! Brands for €62.3 million ($AU87 million) to add to its 192 KFCs in Australia.
The deal includes another 20 new KFC restaurants to be opened this year.
The acquisition will be funded via a $54.5 million equity raising at $5.25 a share, a discount to the last price of $5.88, and some debt.
CEO Graham Maxwell says the Netherlands is a highly attractive market which is under-penetrated for KFC restaurants.
The deal increases the company’s footprint in Europe to 28 KFC restaurants, as this map shows:
The company plans to add four to five new restaurants each year for the next two in Germany, then expanding to 10 restaurants a year after that.
And the company is looking for more opportunities both in Australia and in Europe.
Collins Foods KFC Europe will operate independently from its KFC Australian business.
The company today also released a trading update for the 20 weeks to March 5, showing revenue is up 12.3% to $247.2 million with underlying EBITDA (earnings before interest, tax, depreciation and amortisation) up 5.4% to $30.7 million.
However, Collins Foods says it’s reviewing the carrying value some assets including Sizzler restaurants and Snag Stand which could mean impairment charges.