The SET-listed warehouse provider and food and restaurants operator Sub Sri Thai Plc (SST) has successfully acquired Greyhound fashion and restaurant brand worth 1.85 billion baht with plans to use the business to rapidly expand its food segment.
Greyhound Café in Hong Kong is a trendy dining place for customers to try popular Thai dishes such as Pad Thai and other Thai fusion foods. An industry source said the deal gives SST a short cut in establishing its restaurant brand overseas.
SST together with its subsidiary Mudman have paid 1.26 billion baht cash along with a 15.67% stake in Mudman, which is valued at 588 million baht, to shareholders of Greyhound, according to a report filed to the Stock Exchange of Thailand yesterday.
SST and Mudman bought all 969,900 ordinary and preferred shares in Greyhound Co, the owner of Greyhound and Playhound fashion labels, and 107,843 ordinary and preferred shares in Greyhound Cafe Co, the operator of Greyhound Cafe and Another Hound Cafe restaurants. SST and Mudman entered a buying and selling agreement with the existing shareholders of Greyhound since June 12. The transaction payment was completed yesterday.
An executive of a restaurant operating company who requested anonymity said the deal gives SST a short cut in establishing its food and restaurant brand overseas. Also, the move is in line with the SST strategy of reducing risks in food businesses by using exclusive franchise contracts with master franchisers, including Au Bon Pain, Dunkin’ Donuts and Baskin-Robbins, which all allow only SST to operate their franchises in Thailand.
“It is a huge risk because if the brand owner changes it could affect the master franchisee,” said the source.
The 1.85-billion-baht price tag was considered reasonable in the industry, said the source.
“It is clear Greyhound’s brand goodwill will help SST, especially for their restaurants outside Thailand where they performing quite well,” said a source.
“The deal was not easy for SST as there were a lot of rivals, especially foreign investors, that offered attractive packages.”
A source believed SST managed the acquisition thanks to its offer to allow the founder and shareholders to hold stakes in the company as well as its agreement to manage the business together.
SST’s experience in managing outlets under franchiser contracts can add synergy to the deal, said an industry source.
SST shares fell almost 2% to close at 22.10 baht in trade worth 295 million baht.
Both executives from the two groups declined to comment.
Apart from the deal, Mudman will issue 787,186 new shares or a 9.33% stake at 444.622 baht each and sell them to Khon Kaen Sugar for 350 million baht.
Greyhound Co, with paid-up capital of 96.99 million baht, operates 17 stores in Thailand and exports to South Korea, Singapore and Indonesia. Greyhound Cafe Co, with paid-up capital of 10.78 million, operates 10 restaurants in Thailand, five franchise branches in Hong Kong and two in China.
As of June 4, its five directors Bhanu Inkawat, Pattree Bhakdibutr, Chalita Waiwitaya, Christopher John Cooper and Kritinart Isarangkura na Ayudhya resigned.