Famous Brands advances its strategic investment roadmap

Famous Brands Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1969/004875/06)
JSE share code: FBR
ISIN: ZAE000053328
("Famous Brands" or "the Group")


Famous Brands advances its strategic investment roadmap with acquisition of
majority stake in Lexi’s Healthy Eatery


The Group has acquired 51% of Lexi’s Healthy Eatery (“Lexi’s”) with effect
from 1 April 2022. Lexi’s, whose slogan is “Eat more plants”, is a casual
dining restaurant (“CDR”) brand, offering a full-service, sit-down, plant-
based dining experience across all key day parts: breakfast, lunch and
dinner. The acquisition pertains to the franchise and central kitchen
operations of the business.


Lexi’s was founded in 2018 by Lexi Monzeglio. Lexi is the creative lead on
brand and product development and strategy, while her business partner,
Ezio Nichele, manages the operations of the company, which comprises four
restaurants, three owned by Monzeglio and Nichele, while one is franchised.
The restaurants are located in Rosebank, Modderfontein, Hazelwood
(Pretoria) and Sea Point. Lexi’s also operates a fledgling central kitchen
which develops and produces meals for the restaurants and retails a limited
range of convenience frozen goods to a small number of supermarkets. The
menu is plant-based, being almost entirely vegan, gluten-free and refined
sugar-free.


Management contracts have been concluded with Monzeglio and Nichele.


Strategic roadmap

The acquisition is aligned with Famous Brands’ three-year strategic
roadmap, which includes acquiring brands that have the potential to lead in
their category, and which offer growth prospects based on opportunities to
improve existing operational efficiencies in the target business.


Investment rationale for the acquisition

- Famous Brands’ existing portfolio does not include an exclusively
 vegetarian or plant-based offering, and as a forerunner in its category,
 Lexi’s is a good fit for the Group.
   -   The trend to healthy eating and plant-based foods has been present in
       the market for some time, and continues to grow; this is evidenced by
       the increasing receptiveness to and take-up of healthier and
       vegetarian options on the menus of the Group’s existing brand
       portfolio.
   -   Lexi’s will perfectly complement the Group’s Signature Brands’ Fun
       Dining portfolio, providing a more comprehensive offering to
       landlords where the Group already has a presence, and to existing and
       prospective customers.
   -   Management is confident that the brand offering has strong potential
       to be expanded into a quick-service restaurant format.
   -   There is also scope to develop Lexi’s products for the supermarket
       retail space, and leverage off the Group’s well-established route-to-
       market.
   -   In time, Lexi’s central kitchen could cater for ancillary business
       from the Group’s existing brands, as happens elsewhere in the
       business model.
   -   Lexi’s core values are: to be accessible, healthy, sustainable,
       ethical and carbon neutral; these values complement Famous Brands’
       stated ongoing sustainability journey, which centres on innovation
       and research and development to build a sustainable food services
       business that is good for all stakeholders and the environment.


Benefits of the joint venture partnership

The joint venture partnership offers significant value for both parties.
   -   As the creator and developer of the brand, Lexi Monzeglio brings a
       unique skill set and intellectual capital in a relatively untapped
       market niche for Famous Brands. Together Lexi and her partner, Ezio
       Nichele, will be key to developing the strategic direction of the
       business through their vision and capability.
   -   While historically plant-based food was regarded as a privileged way
       of life, in line with the global trend, there has been a marked
       expansion of the demographics of Lexi’s customers as access to the
       product and appreciation of the plant-based concept grows and takes
       hold in non-traditional market segments. Famous Brands will provide
       the infrastructure, industry experience and working capital to assist
       Lexi’s to realise its potential by helping to make a plant-based,
       sustainable lifestyle more accessible and convenient for communities.


The acquisition consideration falls below the threshold of a categorised
transaction in terms of the Listings Requirements of the JSE Ltd and will
be settled from cash reserves. There are no suspensive conditions.
The financial information on which this announcement is based has not been
reviewed or reported on by the Group’s external auditors.


Midrand
30 March 2022

Sponsor
The Standard Bank of South Africa Limited

Date: 30-03-2022 08:58:00
Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.