Back to Previous

RFG to buy Crust Gourmet Pizza

Sarah Stowe

The Retail Food Group has announced its plans to acquire the Crust Gourmet Pizza Bars business. Predominantly based in NSW and Victoria, the Crust system has expanded to New Zealand, Singapore and the US.

The 11 year old chain of 119 outlets will join another gourmet pizza brand in the group, Pizza Capers Gourmet Kitchen, RFG’s most recent acquisition which has its stronghold in Queensland.

RFG will pay $24 million upfront  (including RFG shares valued at $3 million), with a second payment 12 months from settlement – the difference between seven times Crust FY14 adjusted EBIT less the initial payment.

RFG CEO Tony Alford said the Crust transaction will help with some strategic initiatives: the immediate scale provided by ownership of both pizza systems; further investment within the QSR category; and reduced reliance on shopping centres for outlet growth.

“Whilst it remains RFG’s intent to develop each brand as distinct systems, the acquisition will generate unsurpassed opportunity for the exploitation of supply side economies, collaborative marketing, research and development activities, cross pollination of products and services and a growing expertise in the gourmet takeaway pizza market that will benefit all stakeholders in each system,” Alford said.

Crust CEO Michael Logos will remain with the business, and with co-founder and managing director Costa Anastasiadis, will continue to drive the brand under the RFG umbrella.

“The transaction is the culmination of a six month engagement during which we have had the opportunity to familiarise ourselves with RFG management, culture and strategic objectives,” said Logos.

“The opportunity to partner with a growing public company with proven expertise in the retail food franchising industry offers our franchisees and other stakeholders early access to the benefits of a larger organisation whilst retaining the core attributes that have generated the Crust Gourmet Pizza Bar success story to date,” he said.

The transaction is anticipated to be completed by the end of September 2012, subject to due diligence.

RFG is forecasting that the two pizza brands, Crust and Pizza Capers, will contribute about $7.5 million to its financial year 2013 EBIT, assuming nine months of contribution from Crust.

When the acquisition is completed there will be more than 1,350 outlets in RFG’s network which comprises bb’s cafe, Brumby’s Bakery, Donut King, Esquires Coffee Houses, Michel’s Patisserie, Pizza Capers Gourmet Kitchen.