Retail Food Group's strategic acquisition

Retail Food Group (ASX:RFG) has announced the acquisition of CIBO Espresso from Retail Zoo. This move aims to enhance RFG's growth in South Australia by acquiring 22 retail locations. The acquisition is valued at $2.7 million, with completion expected by mid-FY25.

CIBO Espresso acquisition overview

Retail Food Group (ASX:RFG) has acquired CIBO Espresso to expand in South Australia, gaining 22 retail sites. The $2.7 million acquisition will be fully paid in cash. RFG plans to invest $1.3 million to incentivize franchise partners to transition to Gloria Jean's. The acquisition is expected to close by mid-FY25, with benefits anticipated by FY26. This strategic move is part of RFG's focus on coffee and aims to leverage its global scale, offering franchise partners enhanced marketing and product opportunities. No regulatory approvals are necessary, and the acquisition is expected to have a minimal impact on net debt and EBITDA.

Executive commentary on CIBO Espresso acquisition

The acquisition of CIBO Espresso is a logical step for RFG, enabling us to expand our presence in South Australia and strengthen our coffee business. We are excited to offer incentives to CIBO Franchise Partners and transition them to the Gloria Jean's brand, which will provide them with greater opportunities and resources. We anticipate this transaction to be accretive post-FY25 following the acquisition and conversion costs.