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Grand Parade seals Burger King deal


Grand Parade seals Burger King deal

Published Date: 2021-02-23 | Source: Stephen Gunnion | Author: Stephen Gunnion

Grand Parade seals Burger King deal

The investment group is selling some of its holdings as it tries to create more value for shareholders.

Grand Parade has finalised a deal to sell its Burger King SA (BKSA) franchise a year after it first announced the disposal. The sale to private equity group Emerging Capital Partners (ECP) was revised last July and hit a further obstacle in December when the date for the conclusion of the share purchase agreement expired.

Following continued negotiations, the black-owned investment group said it had concluded the transaction to sell its 95.78% stake in the local burger chain to ECP on materially the same terms it renegotiated last July. While it originally agreed to sell Burger King for R670 million, this was lowered to R570 million due to the impact of Covid-19 on the business. It also reduced the price tag on its Grand Foods Meat Plant (GFMP) to R23 million from R27 million previously.

ECP has raised over $3 billion for private equity investment over the past 20 years, making over 60 investments across the continent and fully exiting 45 of these investments to date, returning over $1.3 billion to investors.

The disposal is part of Grand Parade's strategy to unlock value for shareholders through a controlled sale of underlying assets. It brought the franchise of US burger restaurants to South Africa in 2013 after signing a master franchise agreement with the US group. It is estimated to have spent close to R1 billion on the business.

Before last year's hard lockdown, the group was also in the process of disposing of its 30% stake in Sun Slots. However, as a direct result of the pandemic, the Sun Slots deal fell through.

Grand Parade's results jumped 17% to R2.74 yesterday.

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