Sector surges as KFC business is sold to fellow franchisee
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John Farnsworth, Head of Corporate Finance, Smith Cooper Mar 19, 2021 11:50 GMT Sector surges as KFC business is sold to fellow franchisee KFC UK & Ireland franchisee, the Castlebarn group of companies, comprising 13 restaurants in South East London and Kent area, has been sold to a fellow KFC franchisee, the Caskade Group, for an undisclosed sum. David Catterall and Anton Jebaharan, who have worked with KFC for over 35 years, acquired Castlebarn in 2007 through an MBO and developed it into a successful 13-strong chain employing over 500 staff. The pair also ran Taco Bell restaurants, which like KFC are part of Yum! Brands, but sold these several years ago in the first step to retirement from their restaurant interests.
Transcript of Sector surges as KFC business is sold to fellow franchisee
John Farnsworth, Head of Corporate Finance, Smith Cooper
Mar 19, 2021 11:50 GMT
Sector surges as KFC business is sold tofellow franchisee
KFC UK & Ireland franchisee, the Castlebarn group of companies, comprising13 restaurants in South East London and Kent area, has been sold to a fellowKFC franchisee, the Caskade Group, for an undisclosed sum.
David Catterall and Anton Jebaharan, who have worked with KFC for over 35years, acquired Castlebarn in 2007 through an MBO and developed it into asuccessful 13-strong chain employing over 500 staff. The pair also ran TacoBell restaurants, which like KFC are part of Yum! Brands, but sold theseseveral years ago in the first step to retirement from their restaurantinterests.
The sale came at a time when many restaurant and other hospitality chainswere enduring immense financial pressure. However, KFC demonstratedstrong leadership in the sector, being one of the first to gradually andresponsibly reopen its restaurants after initial closure due to the pandemic. Indoing so, it demonstrated incredible resilience, with trade quickly bouncingback beyond pre-Covid levels.
The buyer, Caskade Group, now operates 47 KFC and 21 Taco Bellrestaurants, having joined the KFC family in 1996.
The sellers appointed national franchise M&A experts John Farnsworth andDavid Crump from Smith Cooper Corporate Finance (SCCF) to initiate,negotiate and project-manage the transaction through to completion.
Former owner David Catterall commented: “We’re delighted to havecompleted the transaction despite the COVID-19 pandemic, and to have soldto a fellow KFC franchisee. SCCF demonstrated great knowledge of the sectorand deployed this, and their deal management expertise, to drive the deal toa completion - always considering the commercial, operational and financialimplications for us as sellers.”
John Farnsworth, Head of Corporate Finance at SCCF and specialist in thefood and beverage M&A sector, who led the deal alongside CorporateFinance Director David Crump commented: “A sale was originally agreed priorto the first government-imposed lockdown - which brought all the deals wewere working on to a temporary halt. However, the strength of the KFC brandmeant that trading recovered quickly and, as a result, the delay on thistransaction was a matter of just a few weeks – making this August 2020completion our first during the pandemic. That recovery is a testament toboth the business skills and experience of David and Anton, and to the teamat KFC UK & Ireland, who demonstrated real sector leadership in challengingcircumstances. It is really pleasing to complete this deal during a verydifficult time.”
David Crump added: “It was a pleasure to work with the sellers in devising aclear exit strategy, and to achieve an outcome that reflected the true value ofthe business. We wish both David and Anton the very best.”
Legal advice was provided to the sellers by Flint Bishop, led by partner,Rachel Bennett and senior associate, William Bowler.
Rachel Bennett commented: “2020 was a challenging year for deals, but thisis a great example of a business and a sector that has adapted well to theCOVID-19 crisis. We are certainly seeing continued appetite from buyers andfunders across a range of sectors where businesses have seized opportunitiesand remained resilient during the crisis.
It was great to work with the sellers and Smith Cooper Corporate Finance onthis transaction. It is always pleasing to see a successful exit for sellers whooriginally acquired the business through a management buy-out.”
Smith Cooper is one of the largest independently owned and preferredaccountancy and business advisory firms for owner managed businessesacross the Midlands. The firm specialises in providing intelligent, efficientand cost-effective bespoke advisory services to both corporate and individualclients. Smith Cooper has six offices across the Midlands including Derby,Birmingham and Nottingham.
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