PAG buys Australia's Craveable Brands from Archer
Australian quick service restaurant chains Oporto, Red Rooster and Chicken Treat have their third consecutive private equity owner after PAG Asia Capital bought the business from Archer Capital.
The acquisition price for Craveable Brands – the holding company for the restaurants – was not disclosed but local media reports put it at A$450-500 million ($316-351 million). Archer aborted an attempt to list the business in 2017, having set pricing terms that implied a market capitalization of A$400 million and a forward price-to-earnings multiple of 12.5x at the upper end of the range.
Craveable Brands has a franchise network of more than 580 stores in Australia that generate approximately A$800 million in annual sales and serve over 150,000 customers a day. Efforts have been made to expand the business internationally, with outlets in New Zealand, Singapore and Sri Lanka, and plans to enter Vietnam and certain markets in the Middle East.
“The transaction will begin a new and exciting chapter for us that will see us further grow Craveable from the solid platform already established. Archer has given us strong support over the last eight years, and we are now very excited to be partnering with PAG and benefiting from their wealth of experience and international connections,” said Craveable CEO Brett Houldin in a statement.
The company, formerly known as Quick Service Restaurant Holdings (QSRH), was the product of a roll-up by Quadrant Private Equity. According to AVCJ Research, it paid A$180 million for a 75% stake in Red Rooster and Chicken Treat in 2007 and then acquired Oporto for A$60 million later the same year. Archer paid A$450 million for QSRH in 2011, with company management taking a 10% interest.
It was one of four assets acquired towards the end of the Fund IV investment period in the months running up to the launch of Fund V. Difficulties in exiting these investments – as well as generating liquidity from Fund V – contributed to the postponement of Fund VI. Last month, the firm revived the plan with a cut back target of A$300 million.
PAG is currently investing its third Asia fund, which closed last November at $6 billion. Past experience in Australia’s food and beverage franchising space includes the acquisition specialist cake retailer The Cheesecake Shop in 2017.
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