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Joe & The Juice may use acquisitions, JVs to add scale ahead of IPO – CEO

Joe & The Juice, a Danish chain of juice and coffee shops, may use acquisitions and joint ventures (JVs) to support its global growth ahead of a potential initial public offering (IPO), CEO Thomas Noroxe told Mergermarket.

It would be interested in acquiring a smaller chain from a struggling operator to gain access to good store locations, Noroxe said. The company will not add new brands through acquisitions though, as it is focusing on growing the Joe & The Juice brand, he said.

The aim is to grow the number of Joe & The Juice bars to 1,000 in “the foreseeable future”, from fewer than 400 today, the CEO said, without further specifying the timeline.

Joe & The Juice is also in a stronger financial position to fund acquisitions after New York-based growth equity investor General Atlantic increased its minority holding to a majority stake and bought out Valedo Partners late last year, according to the CEO.

The General Atlantic deal included a capital increase that provided the company with more than DKK 1bn (EUR 134m), and some of its debt was paid off. Its net debt/EBITDA leverage is now 1x, he said.

The company also posted an 80% increase in EBITDA to DKK 498m in 2023, with a 20.3% EBITDA market, according to its annual report.

The company is seeking to grow in Europe and the US, where there are a lot of white space opportunities, Noroxe told this news service. The US is its largest market, followed by the UK and the Nordics, but Joe & The Juice is also expanding in France and the Benelux, he said.

It also entered the Middle East market, including Kuwait, UAE, Bahrain, Qatar and Saudi Arabia, via franchise partners 18 months ago and has around 35 outlets in the region, the CEO said, adding that the company expects to double this number in the next year.

To reach its target of 1,000 outlets overall, the company is building regional foundations with strong local managements and infrastructure, which will operate independently with a wider mandate and ability to take more decisions locally, the CEO said. This will include a responsibility for the P&L in those regions, he added.

In addition to the franchise model, the company is also interested in joint ventures with local partners to enter and operate in markets that are far away. For example, Joe & The Juice previously had five stores in Australia without any local ownership that became challenging to operate from its headquarters in Europe, and the company ended up exiting the Australian market during the global pandemic.

Nevertheless, Joe & The Juice sees high potential in Australia with the right local partner and could re-enter that market at some point, the CEO said.

In the US and Europe, though, it will seek to open new stores independently, he noted.

“The global pandemic made us really rethink our model – where we have been successful and where we have been less successful. I think it’s an important time in life and for a company like Joe & The Juice to have that time to pause and reflect,” Noroxe said.

According to the annual report, the company achieved “full neutralization of prior years’ headwinds from COVID-19” in 2023 when it reported revenues of DKK 2.4bn – a 41% increase from the previous year’s DKK 1.7bn and double the revenue of DKK 1.2bn billion generated in 2021.

The revenue growth was mainly driven by 35% growth in same-store-sales, which was partly derived from price increases to absorb the impact of high inflationary pressures on input prices throughout 2023, it said.

The company is also in the process of making the business more digital, primarily by making the Joe Loyalty App faster and more interactive while providing more benefits to its customers, the CEO said.

Growth and IPO in the US

In 2022, the CEO told British media that the company was preparing for a stock market listing, and added that an IPO could take place as soon as that year, although it may not happen until 2024.

At the moment, there is no set timeframe for an exit, Noroxe said. But, being a PE-owned business, Joe & The Juice is “in essence always for sale”, he added. General Atlantic declined an opportunity to comment.

The CEO said he can see Joe & The Juice being listed in the US, as it shows “best in class growth” and the US is an attractive market for growth companies. This is also where its main peers are – companies such as Starbucks [NASDAQ:SBUX], Shake Shack [NYSE:SHAK], Chipotle [NYSE:CMG], CAVA [NYSE:CAVA] and Dutch Bros [NYSE:BROS], he added.

The part of the company that is not held by General Atlantic is owned by minority shareholder Nassef Sawiris’ family office NNS and the company’s employees, the CEO said.

Joe & The Juice recently hired former Starbucks executive Robert Lynch as its chief operating officer (COO) and appointed a former Domino’s Pizza executive, Jeffrey Lawrence, as a director on its board, Noroxe said, referring to both appointments as “strategic”.

The company has around 4,600 employees.