Mad Butcher owner Veritas buys stake in Burger King patty supplier
Veritas Investments, which bought the Mad Butcher franchisor business in March this year, will spend at least $3.4 million in cash and shares for a half-stake in the meat patty supplier for the local Burger King franchise.
The Auckland-based firm will buy half of Kiwi Pacific Foods for $2.8 million in cash and $400,000 in shares at $1.38 apiece, with potential earn-outs if certain export targets are met. The owner of the remainder of the business is Antares Restaurant Group, which holds the New Zealand Burger King franchise.
The cash component of the sale will be funded by a debt facility with ANZ Bank New Zealand, and Kiwi Pacific is expected to contribute $550,000 in after tax profit in its first year.
"Kiwi Pacific Foods is a business that can be supported by the procurement base of the Mad Butcher Limited business and aligns us with the iconic 'Burger King' brand as our cornerstone client," Mad Butcher chief executive Michael Morton said in a statement. "We see good growth opportunities in export markets through the Burger King connections internationally."
Veritas bought the Mad Butcher in what was effectively a reverse listing, having sold its assets and returned capital to shareholders.
The company's shares were unchanged at $1.29 today.
Tango Holdings, the parent of Antares Restaurant Group, had a net loss of about $1.88 million in calendar 2012 on sales of $174.9 million.