Retail Food Group is acquiring boutique coffee chain Cibo Espresso from Retail Zoo for $2.7m.
The acquisition will accelerate RFG’s growth in South Australia as it looks to rebrand the Cibo Espresso stores to Gloria Jean’s.
Currently Gloria Jean’s has six cafes in South Australia, four of them in Adelaide. These stores generate network sales of about $5m.
Eighteen of Cibo’s 22 stores are in Adelaide; the total network brings in revenue of about $20m.
In the Cibo Espresso chain there are three multi-unit franchisees; four stores are company owned.
Cibo Espresso transition to Gloria Jean’s
The new franchisors will invest $1.3m into the network to encourage Cibo franchisees to fast-track their transition to Gloria Jean’s. The incentives will include capex for rebranding and new equipment to unlock business growth.
RFG will offer a menu boost including cold beverages and acai to help drive network sales growth. Franchisees will also benefit from a larger marketing fund.
Synergies across the network include support functions such as IT, finance, leasing and vertical integration of coffee supply.
Retail Food Group CEO Matt Marshall said “This acquisition aligns perfectly with our strategic goal to grow our core brands in the Café, Coffee, Bakery (CCB) channel and is an important step to deliver Gloria Jean’s bold ambition to become the most visited beverage destination in the world.”
RFG will fund the transaction through cash on hand with a completion date expected mid FY25. The company estimates FY26 post synergies EBITDA at $1.2m – $1.8m.
