Smart50 star Pizza Capers sold to Retail Food Group for $30 million

Twelve-year-old gourmet pizza franchise Pizza Capers has been bought for $30 million by listed franchise group Retail Food Group, with plans to increase store numbers by 18% in 2012.

RFG says Pizza Capers, winner of several SmartCompany awards, presents a tremendous organic growth opportunity, with 20 new stores planned this year.

Pizza Capers was started by Anthony Russo and Scott Geiszler in Brisbane in 1996, and shifted to franchising in 2005. It now has 109 outlets across Australia, plus one in Singapore, and is expected to turn over $4.3 million in earnings before interest and taxation in the 2013 financial year. Its last revenue figure was $50.6 million in the 2011 financial year.

The sale price is seven times the expected 2013 EBIT (earnings before interest and taxes).

Russo and Geiszler will remain with the business for at least 12 months after the deal goes through in April, RFG says.

Russo said in a sharemarket announcement that the pair was “excited by the opportunities that will be created for the system and its franchisees when incorporated within the infrastructure and sophistication that RFG offers.”

“The systems, processes and supports structures to be bought to the business by RCG will supercharge our growth and operations. We are looking forward to working with RFG and continuing the Pizza Capers success story,” he added.

The Queensland-based company came in 13th in SmartCompany’s Smart50 awards in 2010, with revenue at $54 million, and annual growth of 77% over the previous three years.

RFG is the franchisor of Donut King, Michel’s Patisserie, Brumby’s Bakeries, bb’s cafe and Esquires Coffee Houses franchise systems. It has 1,148 outlets as at 30 June 2011.

Its chief executive officer Tony Alford said RFG had talked with Pizza Capers for 18 months, and decided the company had “distinguished itself within a highly competitive QSR [quick service restaurant] segment.”

“Pleasingly, the vendors have also come to appreciate that RFG has the expertise to foster sustainable network growth outside of Pizza Capers’ traditional Queensland base whilst also providing the infrastructure necessary to service and support franchisees during challenging economic times,” Alford said.

Last year, RFG made a surprise – and ultimately unsuccessful – bid for the debt-laden apartment-hotel company Oaks Hotels & Resorts.

It listed in 2006 after acquiring the world intellectual property rights to the Donut King system, following up with purchases of the Brumby’s franchise systems and Michel’s Patisseries franchisees.