Australian food franchisor and wholesale coffee roaster, Retail Food Group, has bought the global Gloria Jeans global business for $163.5 million.
Gloria Jeans, founded in Chicago in 1979, has 800 franchised outlets across 40 countries, including 450 in the US. Retail Food Group also owns Michel’s Patisserie and Donut King.
Tony Alford, CEO of Retail Food Group (RFG), says the Gloria Jean’s Coffees business encompasses the farm-to-cup story.
It direct-farm sources green beans which are then roasted within the group’s Australian and American facilities for distribution to the world-wide franchise network and third-party customers.
“No other retail food franchise acquisition opportunity in Australia presents the scale of immediate and longer term benefits, and in this respect is both unique and compelling,” he says.
Of the $163.5 million purchase price, $153.5 million will be paid in cash and $10 million in shares. There’s a further $16.4 million conditional upon milestones and earn-out achievements.
RFG has secured an increase to its NAB debt facility from $135 million to $253 million. The company expects net profit to increase 36% to $50 million in the first half of the current financial year.