Famous Brands South Africa Acquires 49 percent Stake in Mr. Bigg’s

Famous Brands, South Africa, has acquired a 49 percent stake in UAC Restaurants Limited (UACR), a subsidiary of UAC of Nigeria PLC (UAC), the company has announced. The deal, which is effective from 1st October 2013, will give Famous Brands the 165 UACR franchised restaurants across Nigeria with 57 in Lagos and 14 in Abuja. A statement released by the company states: “UAC is a diversified conglomerate with operations in foods, paints, logistics and real estate. UACR manages the Quick Service Restaurant (QSR) component of UAC’s business and houses the flagship Mr. Bigg’s brand, said to be the single largest food franchise brand in Africa. 45 percent of the company’s franchised restaurants and 40 percent of its revenues are concentrated in three states. UACR also has a small logistics and manufacturing component.” “Mr. Bigg’s trading format consists of quick service restaurants situated on high foot-fall sites, and its product offering ranges 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 some 635,000,000 meat pies have been sold by the brand since its inception.” Famous Brands Chief Executive, Kevin Hedderwick said, “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.” “This joint venture delivers compelling benefits for both parties: UACR will be vending in a formidable brand (Mr Bigg’s), local expertise and existing franchisees, as well as a nationwide distribution network and Lagos-based manufacturing infrastructure. In exchange, Famous Brands will add value to the business through our expertise in managing intellectual property, growing brands and optimising supply chain operations and efficiencies.” Hedderwick states, “Historically one of the key challenges of expanding into the rest of Africa has been to source suitable local partners. This acquisition surmounts that obstacle and enables us to not only acquire a substantial stake in an existing leading home-grown brand in Nigeria with opportunities to unlock value in that market, but also to export the format to other markets. We foresee our operations in the rest of Africa becoming increasingly significant to the Group over time.” Larry Ettah, UAC Group Managing Director and CEO, said, “This is a transformative transaction which ensures UACR has the necessary strategic partner to unlock the considerable value potential in the QSR landscape which Mr Bigg’s defined 25 years ago and in which it still maintains a leadership position.” “Nigeria is an attractive destination for QSRs and the country has seen an influx of international brands recently. Future consumer expenditure is underpinned by a range of key drivers, including higher monthly income levels resulting from GDP expansion, an increase in the minimum wage (from N7500 to N18000), and a shift in social class demographics, with the middle class (the business’s core target market) expected to increase to 35% of the population in 2015 compared to 30% in 2009. Significantly, this middle class comprises a large, young population with an average age of 18,” concluded Ettah.