The listed Collins Foods (CKF) company could be among the potential suitors for Retail Zoo -- the company that owns the Boost Juice health drink franchise whose private equity vendors are eyeing a trade sale.
Collins operates 122 KFC outlets in Australia and 27 Sizzler restaurants.
Chairman Russell Tate said at the company's annual general meeting last month that expansion was on the agenda for the business. It's worth remembering Collins was sold via an IPO by Pacific Equity Partners and not without some controversy, of course, given the $200 million float in 2011 was, within three months, tarnished by a whopping profit downgrade.
Collins, which is part of the Uncapped 100, could not be reached for comment last night.
Retail Zoo is 70% owned by US-based private equity firm The Riverside Company, while the remainder of the company is mainly owned by founders Janine and Jeff Allis.
The shareholders have been working with investment bank UBS on options, which could include a trade sale or a potential listing on the Australian Securities Exchange, as revealed by DataRoom on Monday.
There are close to 200 Boost Juice bars in Australia, with about a quarter company-owned.
But Retail Zoo has expanded to include other food franchise brands, such as Salsa's Fresh Mex Grill and Cibo Espresso.
Market sources yesterday said comparative listed franchise businesses included Domino's Pizza, the Retail Food Group as well as Collins Foods itself.
Unlike Retail Zoo, Domino's and Collins Foods were both master franchisees, where brands were owned by US-listed companies, and were involved in the fast food, rather than the health food, business.
The volatility surrounding fruit and vegetable prices could be among the challenges for Retail Zoo if it is unable to regularly adjust its prices, a market analyst said yesterday. While retail sales remained subdued, the price of retail stocks had improved, the analyst said.
The company is said to boast turnover of $300m a year. It is likely the business will be pitched at more than 10 times earnings before interest, tax and depreciation, for a sale in the "several hundreds" of millions.