Fast food company will pay for purchase in cash and shares
Famous Brands buys Coffee Contact
December 5, 2006
By Samantha Enslin
Durban - Famous Brands, the owner of the Wimpy, Steers and Debonairs brands, has bought a controlling stake in Coffee Contact from co-owner Charalambos Halamandaris, who is related to four Famous Brands' board members including the chief executive.
Chief executive Theofanis Halamandaris, executive chairman Panagiotis Halamandaris and non-executive director Periklis Halamandaris are brothers. John Halamandres, the non-executive deputy chairman, is their cousin.
All family members recused themselves from discussions regarding the deal, which was concluded by chief operating officer Kevin Hedderwick and financial director Paris Papageorgiou, who are non-related parties.
Famous Brands will buy 70 percent of the business with a combination of cash and the issue of Famous Brands shares at R12.50 each.
The group did not disclose the acquisition price but said it was not material and Coffee Contact would not have a significant impact on its results.
Coffee Contact roasts and blends coffee beans for sale to the restaurant and hospitality trade in Gauteng under the Café Maestro brand.
It was started three years ago by Gerry Parginos. The business is jointly owned with Charalambos Halamandaris, who is a minor shareholder in Famous Brands. Both have signed two-year service contracts with Famous Brands, which include restraints of trade.
The deal, which is still subject to certain conditions and a due diligence, would be ratified at the next board meeting at which family members would recuse themselves, said Papageorgiou, responding to questions regarding the process of the deal.
In terms of JSE rules, this is not a related party transaction, which applies to deals done with immediate family such as children and spouses.
Famous Brands will use Coffee Contact to expand its product range sold into the retail and hospitality markets. Early this year the group established a catering service division.
Hedderwick said in a statement announcing the deal that initially the aim was to expand the Coffee Contact business nationally and then assess whether there were opportunities to supply coffee to the group's franchise brands.
Famous Brands' also owns the House of Coffee and Brazilian coffee quick-service restaurant brands. "The cafe society culture is rapidly taking root in this country and we are enthusiastic about the potential growth," said Hedderwick.
Famous Brands shares were unchanged at R12.80 yesterday, while the travel and leisure sector dropped 0.17 percent.
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