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No pie in the sky: RFG snaps up Beefy's for $10 million, tips strong growth

Business

Retail Food Group has bought Beefy’s Pies for $10 million with expectations of $18 million in revenue to flow into the Sunshine Coast-based bakery business in 2024.

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RFG already owns Gloria Jean’s Coffees, Brumby’s Bakeries, Donut King, Michel’s Patisserie, Di Bella Coffee, The Coffee Guy, Café2U, Pizza Capers and Crust Pizza.

RFG said Beefy’s would have an EBITDA of $2.5 million in 2024 and has grown its sales by 12 per cent in the first quarter of this financial year. RFG shares jumped almost 9 per cent following the announcement.

The $10 million price included $5.5 million in cash plus 33 million RFG shares to the sellers and deferred cash payments of $2.5 million. Beefy’s was owned and founded by the Hobbs family and has nine stores and 200 employees.

Beefy’s chief executive Mark Hobbs said the family was proud of its achievements.

“Joining the RFG network will help Beefy’s take the next step in its growth journey as we will become part of a team with many decades of experience as well as benefit from being a group with a larger balance sheet and access to support functions,” Hobbs said.

RFG chief executive Matt Marshall said the company was pleased to be in a position to be able look for inorganic growth.

“The acquisition of Beefy’s is significant not only because it is a great business that is complementary to our existing brand portfolio but because it marks the beginning of RFG’s next phase of growth,” he said.

RFG also extended its debt arrangements with Washington H Soul Pattinson by a further $20 million.

The new facility will be immediately drawn down by $5 million and the rest used for future growth opportunities

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