Cluck ’n Go — Exit Strategy & Investor Returns
The Company recognises that equity investors require a clear pathway to liquidity. Three exit strategies have been identified, each offering attractive returns based on the projected financial performance:
Section 15 · Business Plan
Exit Strategy & Investor Returns
The Company recognises that equity investors require a clear pathway to liquidity. Three exit strategies have been identified, each offering attractive returns based on the projected financial performance:
Over the investment horizon, with exit options including trade sale, franchising and strategic acquisition.
The Company recognises that equity investors require a clear pathway to liquidity. Three exit strategies have been identified, each offering attractive returns based on the projected financial performance:
15.1 Trade Sale / Strategic Acquisition
The most likely and attractive exit route is a trade sale to a larger QSR group or food services conglomerate seeking geographic expansion into Mpumalanga. Based on current South African QSR transaction multiples of 5–8x EBITDA, a sale at Year 5 could value the Company at R39–63 million (based on projected Year 5 EBITDA of R7.8 million), delivering a return on investment of 5.2–8.4 times the original equity investment.
15.2 Private Equity Secondary Sale
A secondary sale to a private equity fund with a focus on the consumer and hospitality sector represents an alternative exit route. Private equity investors typically seek high-growth, scalable businesses with proven unit economics and franchise potential – all attributes of the Cluck ‘n Go model. A secondary sale at Year 4–5 at a 6–7x EBITDA multiple would deliver comparable returns.
15.3 Management Buyout
In the event that external acquisition interest does not materialise at acceptable valuation levels, a management buyout funded through a combination of vendor financing and bank debt represents a feasible fallback option. The founding team’s deep involvement in the business and the strong cash generation profile support this alternative.
15.4 Dividend Policy
The Company will adopt a conservative dividend policy during the growth phase (Years 1–3), with all surplus cash reinvested in the business. From Year 4, a dividend payout ratio of 15–25% of net profit after tax is envisaged, providing investors with interim returns while maintaining adequate cash reserves for expansion activities.
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