Health-focussed fast food chain Oliver’s Real Food (OLI) has finalised a long-term supply agreement with UK based EG Group.
Under the agreement EG will pay Oliver’s a one off $500,000 license fee for the exclusive use of Oliver’s branding under a 10 year deal. Oliver’s will also supply all products sold at EG’s Oliver’s outlets. Under the deal, EG will also be required to open 100 Oliver’s outlets within 12 months of signing the deed.
The agreement follows the termination of an initial acquisition plan announced in March, in which EG were to pay OLI $0.10 cash per share. However the deal did not proceed as OLI’s net indebtness exceeded the agreed $800,000.
Oliver’s Founder and Chairman Jason Gunn said the company were thrilled with the new arrangement.
“We are delighted to have reached this commercial arrangement with EG. EG recognised in Oliver’s a brand with significant credibility in this market, and we have found in EG a fantastic partner to expand the Oliver’s brand rapidly, on a national scale. We have enjoyed working with the team at EG over the last nine months, and we look forward to developing the relationship in the years to come.”
The deal follows EG’s failed takeover bid for Caltex, which the petrol company rejected in favour of a deal with Canadian chain Couche-Tard. That deal is currently on hold due to the challenges posed by COVID-19 and the resulting drop in global fuel demand.