Famous Brands buys 49.9% of catering group

Not an earth shattering announcement this morning, bound to get some Sandton tongues wagging, that is for sure darling. This morning, there was an announcement from Famous Brands that they are acquiring a 49.9 percent stake in a business that you may well know well, if you live up here in Jozi. By Word of Mouth catering. 23 years on, husband and wife team Karen (founder in 1993) and Adrian (joined in 2003) will sell half to Famous Brands. Price? Well, this falls inside of the rules of having to notify the market, less than five percent of the market cap. Current market cap is 16.5 billion Rand, so less than 5 percent of that. Paul knows Karen, she actually runs with him. Eating all that marvellous food means that you HAVE to do lots of exercise, right?

The business itself seems pretty cool, employs 200 folks and is known for great quality. I have been to a wedding where the catering was done by them, Byron went to one a few weeks back, he said that the food was awesome. This is part of the intention of Famous Brands, they announced an intention to push to more catering. I suspect that this is more competition for Bidcorp. This is however a space of investment that we like a lot, more convenience, more eating out. Nice, and well done to entrepreneurs for attracting such a big investor. According to their website: "By Word of Mouth is delighted to have been voted Best Caterer Johannesburg for the 16th consecutive year at the Best of Joburg Awards."

Forget real life Shark Tank, the size of these deals, buying entrepreneurs like Karen Short and of course Natasha Sideris (who opened the first Tashas in 2005 at Atholl Square) means you are leveraging off their energy, using your balance sheet. Expect more of these over the years, as well as launching other branded restaurants. Lovely. This is ocean fishing, not shark tanking.