MergerMarket, March 5, 2015
Massimo Zanetti Beverage Group, a Treviso, Italy-based coffee company, is planning more acquisitions, licensing deals and franchising agreements to continue expanding globally, COO Pascal Heritier said. The company is also still on track to go public in May, he added.
MZB Group, which owns international coffee brands such as Segafredo Zanetti and Chock Full O’Nuts, and has more than 330 franchised Italian-style coffee houses around the world, has annual sales of around EUR 800m and EBITDA of around EUR 63m.
To continue expanding, the company is constantly looking at potential acquisition targets. “M&A is part of the DNA of our group,” Heritier said. MZB is seeking to make acquisitions that will help it gain a foothold in new markets or expand in existing ones. It also seeks to acquire brands that are complementary to its offering.
Heritier said that MZB receives proposals from potential targets “every week,” with the proposals coming from sell-side investment banks and directly from companies seeking to be acquired. He also said there are “no limits” on the size of potential targets.
In February, MZB acquired Costa Rica-based coffee company Ceca for an undisclosed amount. In 2014, it acquired Boncafe Group for USD 85m. Boncafe, which posted about USD 7m in EBITDA in 2013, is a roaster and seller of roasted gourmet coffee and coffee machine equipment in Southeast Asia and the Middle East.
MZB is also busy seeking franchisees to help the company expand its cafés, especially in the US and Latin America. John Boyle, COO of MZB’s US division, said that five different operators, or franchisees, are expected to continue opening stores in the US and the Caribbean.
The executive said the company is expanding in Mexico, where franchisee Café El Marino expects to open two stores this year.
Earlier this month, MZB signed a partnership agreement with China-based food & beverage conglomerate TNPI that will allow it to expand its presence in that country and Hong Kong, where coffee consumption is expected to grow 20% annually. As part of the agreement, TNPI plans to open more than 20 stores by the end of 2015. It aims to have more than 50 locations by the end of 2019.
MZB is also keen on establishing more licensing agreements. Earlier this week, the company announced it signed an agreement to roast and distribute coffee under the Krispy Kreme brand to grocery stores, mass merchants and club stores in the US. “We could add more brands to our portfolio,” Boyle said.
Meanwhile, the company is also busy getting ready for its upcoming initial public offering in May. MZB plans to float a 30% stake on the Milan Stock Exchange. “It is too early to provide valuation expectations,” Heritier said, adding that he expects the roadshow to begin in late April. Proceeds of the IPO would be used to finance the company’s expansion plans.
The company originally planned to go public in October or November of last year, but postponed the listing citing adverse market conditions.
MZB is working with BNP Paribas, Banca IMI and JP Morgan for the public offering.