Quick-service and casual dining restaurant franchisor Famous Brands (FBR) has acquired a 49% stake in leading Nigerian brand Mr Bigg’s.
The company said on Monday it had reached agreement with UAC of Nigeria plc (UAC), a leading diversified conglomerate with operations in foods, paints, logistics and property, to acquire a 49% stake in its wholly owned UAC Restaurants.
UAC Restaurants manages the quick-service restaurant component of UAC’s business and houses the flagship Mr Bigg’s brand, the largest food franchise brand in Africa, north of the South African border, the company said.
Famous Brands did not disclose the value of the deal, but said it would be funded out of cash reserves.
The deal is effective from October 1 2013.
UAC Restaurants consists of 165 franchised restaurants across Nigeria, with 57 of them in Lagos and 14 in Abuja. Forty-five percent of the company’s franchised restaurants and 40% of its revenue is concentrated in Nigeria’s three key commercial centres. UAC Restaurants also has a small logistics and manufacturing component.
Famous Brands CEO Kevin Hedderwick said the acquisition boosted the group’s strategy to expand its presence in the broader African quick-service restaurant market.
"Whilst we have traded in Nigeria for the past 11 years through a combination of master license and franchise agreements, this transaction catapults us to a completely different level, enabling us to meaningfully expand our presence in this burgeoning, currently low consumption per capita organised food service market," he said.
"It also underlines our ambitious and deliberate plans to grow our business outside SA. Trading in Africa is inevitably about being first to market and we believe this transaction represents a significant step-change through which we will further entrench our leadership position within the branded food service industry in Africa."
Hedderwick said Mr Bigg’s had an extensive on-the-ground presence and huge loyal customer base demonstrated by the 100 000 consumers who visit the brand’s restaurants daily.
Mr Bigg's trading format consists of quick-service restaurants at high foot-fall sites, and its products range from pastries and other snacks to burgers and hot meals.
About 25 000 pieces of chicken are sold in Mr Bigg’s restaurants daily while about 635-million meat pies have been sold by the brand since its inception.
"Our immediate goal is to bed down this joint venture and optimise on the evident success of the existing operation and its enormous potential within the Nigerian market," Hedderwick said.
Famous Brands' other brands include Steers, Wimpy, Debonairs Pizza, Mugg & Bean, FishAways, Milky Lane, Juicy Lucy, O'Hagan's, Keg, Europa and Fego Caffe.