Sphera Franchise Group, the owner of the KFC, Pizza Hut, and Taco Bell franchises in Romania, officially announced its intention to list its shares on the Bucharest Stock Exchange on Monday, October 9. The company’s shareholders want to sell a 25% stake in the company via the initial public offering (IPO) by the end of this year.

Sphera Franchise Group is one of the biggest restaurant operators in Romania, with RON 516 million (EUR 113 million) in sales in 2016, up 27% over the previous year. The group’s net profit reached RON 51.6 million (EUR 11.3 million) last year, up 9% year-on-year.

KFC ranks second in the quick service restaurants (QSR) segment in Romania, after McDonald’s. Pizza Hut Dine-In is the market leader in the full-service restaurants (FSR) segment and Pizza Hut Delivery ranks second in the delivery segment (in terms of sales), according to the group’s presentation. The company also owns the KFC franchise in the Republic of Moldova and in two regions in Northern Italy.

The company's owners are local investors Radu Dimofte (43.67% indirect stake), Lucian Vlad (33.33% indirect stake), and Nicolae Badea (23.00% indirect stake). The three shareholders are amongst the founders of the KFC and Pizza Hut franchised business in Romania.

The group’s franchised foodservice business was launched in 1994, with the opening of the first Pizza Hut restaurant, which was followed by the opening in 1997 of the first KFC restaurant, both in Bucharest.

Since 2012, the Group expanded its restaurant network by 40 units, or by 63%, to a total of 104 as of 30 September 2017, comprising 67 KFC restaurants (63 restaurants located in Romania, two restaurants located in the Republic of Moldova and two restaurants in Italy), and 37 Pizza Hut units (of which 16 are delivery units).

“Our business model has proven to be successful and allowed the roll-out of 40 new restaurants between 2012 and September 2017 while maintaining strong levels of like-for-like sales growth. We have further ambitious development plans with another 10 new openings planned by the end of 2017,” said Mark Hilton, Sphera Franchise Group CEO.

“We believe we have significant growth potential in the coming years, both in the performance of our existing restaurants and also through the roll-out of KFC, Pizza Hut and Taco Bell in Romania and the development of a sizeable KFC business in Italy. Our plan is to exceed 240 restaurants by the end of 2022. We are encouraged by the market environment and anticipate that the positive macroeconomic and industry trends will continue in and beyond 2017,” he added.

Meanwhile, the company’s listing on the Bucharest Stock Exchange should raise its profile and visibility.

Czech brokerage firm WOOD & Company is acting as Sole Global Coordinator and Joint Bookrunner in connection with the offering. Raiffeisen Bank (Romania) is Joint Bookrunner and Alpha Finance Romania is Co-Lead Manager. Rothschild is acting as financial adviser.

Taco Bell opens first restaurant in Romania on October 12

editor@romania-insider.com