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Bain Capital acquires Retail Zoo

Sarah Stowe

Bain Capital, a private equity firm based in the U.S, has acquired Retail Zoo, the parent company of Boost Juice, Salsa’s Fresh Mex Grill, Cibo Espresso and Hatch Chicken Shop.

The company was previously owned by private equity firm The Riverside Company, along with founders Janine and Jeff Allis.

According to SmartCompany, The Riverside Company held a majority stake of 70 percent.

Retail Zoo will now be indirectly owned by its founders and funds advised by an affiliate of Bain Capital.

It is believed the Allis’s, along with CEO Scott Meneilly, will remain heavily involved in the business and continue to manage its operations; meanwhile Bain Capital will support Retail Zoo’s growth opportunities through the deliverance of capital, strategic and operational knowledge and advice.

While an official press release on the Bain Capital website states the financial terms of the acquisition remain confidential, rumoured sale amounts have been reported by various media outlets including Reuters and SmartCompany, who state the deal is worth around A$185 million.

According to Craig Boyce, a managing director at Bain Capital, the Retail Zoo brand is appealing in many ways.

“Retail Zoo is highly aligned with our Australia investment strategy – leveraging our global QSR experience and a platform for international expansion.

“It participates in attractive QSR categories with leading market positions, very strong brands, solid customer relationships and numerous opportunities for further growth. We plan to work with the founders and management to build on their superb record of achievement,” he added.

This marks Bain Capital’s second major investment in Australia – in 2011 it claimed a stake in accounting software group MYOB.

The company has invested in a series of quick service restaurant (QSR) brands in the past, including Domino’s Pizza, Dunkin’ Brands, Burger King, and Bloomin’ Brands, the parent company of Outback Steakhouse, Fleming’s, Bonefish Grill and Carrabba’s Italian Grill, among others.

Janine Allis said the company is looking forward to working with Bain Capital to continue to grow Retail Zoo into a world class QSR business – it currently operates in nine countries including Malaysia, South Africa and the UK.

“After our first meeting with Bain Capital, we knew we had met the partner that can assist us in our growth strategy and from the start of the process was our preferred partner.

“Since we opened our first Boost store in South Australia in 2000, the group has evolved in a number of exciting ways … I am sure that the next phase of evolution will be just as exciting,” she added.

Boyce identified Boost Juice as one of the company’s key brands, and also recognised the potential of its three younger offerings.

“We see an exciting opportunity to build on Boost’s strength as the leader in the Australian food and beverage market, with further health-oriented product innovation and site expansion beyond the traditional mall locations into universities, train stations, airports and petrol stations,” he said.

“In addition to Boost, Retail Zoo has three, young, compelling concepts to grow the business, leverage the QSR platform and create further franchisee opportunities via enhancing Salsa’s offering, in the fast-growing Mexican category, expanding Cibo, South Australia’s favourite coffee, into other states and developing Hatch, an innovative rotisserie chicken experience starting in Victoria.”

CEO Scott Meneilly said: “The company’s strength is built on its entrepreneurial culture and its ability to anticipate market opportunities, execute roll-out plans and protect and nurture our brands. I am very confident we will continue to do that with Bain Capital.”

It is expected Retail Zoo will generate an estimated $A260 million in network sales in FY2014, and it has a record of strong and consistent sales and EBITDA growth.

Nomura Australia was sole financial adviser and mandated lead arranger and bookrunner to Bain Capital. Retail Zoo was advised by UBS.

Retail Zoo currently comprises 294 stores in Australia and 100 international stores.