The purchase is payable in cash against profit warranties of €916,753 for the year ending 31 January 2017. Finalisation of the transaction is subject to the findings of a due diligence process. The founders of Hot Hot will continue to manage the day-to-day operations of the business as 50% shareholders.
The brand has grown to 15 restaurants, since it was founded in September 2012, and serves more than 7,500 customers per day. Its menu is based on traditional gastronomy burgers with modern touches. Innovative products are the result of continuous research and highly skilled operators. It has enjoyed solid growth, as consumers have been drawn to its high quality yet affordable products and its ‘American diner’ concept, which is unique in its geographic target markets.
The agreement is also expected to bring growth opportunities for Gold Brands’ homegrown brands in new markets. Furthermore, Gold Brands is confident that there will be a two-way transfer of knowledge and experience, to the benefit of the new and existing brands in the company’s portfolio.
Commenting on the agreement, CEO Praxia Nathanael, said, “This deal comes hot on the heels of our partnership agreement with Casual Dining Group, which was announced last week. We are excited by the value proposition of the chain, as ‘American diner’ themed burger restaurants are rare in Greece and Crete, and as such the product offers a unique experience to local consumers. The innovative menus provide a modern twist on the traditional burger and the décor and music offer an entertaining dining experience, which resonates with our flagship South African brands, Chesanyama and Black Steer.
“Based on the agreed profit warranties, we are confident that Hot Hot will be earnings accretive in its first year, with the added advantage of introducing a currency diversification aspect to our revenue streams. We have known the founders of the business for some time; they are like-minded operators. We have every confidence that they are the right people to drive the continued growth of the brand, with further downstream opportunities to take our locally-grown brands into Greece.”
Vasillis Haritakis, co-founder of Hot Hot said, “The deal with Gold Brands, a public company with a proven track record of conceptualising and growing successful franchise brands, will take Hot Hot Burger Bars into another dimension. The prospect of being part of a bigger group, with a larger portfolio of brands to increase our penetration in Greece and Crete is exciting. We look forward to a long and fruitful partnership with Gold Brands.”
The agreement delivers on Gold Brands’ vision to become a leading food services company, with both company-owned and franchise brands within the South African market and internationally, by offering customers unique and authentic brands with unbeatable value.
