Fast food restaurant operator Collins Foods is paying $25.46 million for 13 KFC outlets around the New South Wales and Victorian border.
CEO Graham Maxwell says the purchase strengthens Collins Foods’ position as the largest KFC franchisee in Australia, taking the total to 191 outlets in four states and one territory.
A short time ago, Collins Foods shares were up more than 8% to $4.56.
The restaurants are being purchased from local companies Chrikim Pty Ltd, Skeeter Wright Pty Ltd and Geoff Wright Corp Pty Ltd.
“Given Collins Foods’ experience operating KFC restaurants in Australia, we expect to be able to drive synergies and margin improvement,” said Maxwell.
“This acquisition, without factoring any margin improvement or synergies, will be immediately earnings per share accretive and enhance shareholder value.”
Collins Foods bought Competitive Foods’ 42 KFC restaurants in Western Australia and the Northern Territory a few years ago.
This latest acquisition is valued at $25.46 million, including $10 million in Collins Foods shares.
Collins Foods, which also owns Sizzler restaurants in Australia and Asia, in December announced a 33.6% rise in first half profit to $14.3 million. Revenue was up 5.1% to $269.7 million.