Retail Food Group (RFG), the franchiser and owner of the Donut King, Brumby’s Bakeries, bb’s Cafe, Michel’s Patisserie, Pizza Capers, Crust and Big Dads Pies brands, has bought Gloria Jean’s Group for $163.5m.

Gloria Jean’s operates 358 stores in Australia, 87 in the United States and franchises in 40 other countries.

Retail Food Group (RFG) will pay $153.5m in cash plus $10m in its own shares, in addition to a further $16.4m depending on the company’s performance.

Retail Food Group chief executive Tony Alford told Sydney Morning Herald that the acquisition of Gloria Jean’s will increase its store count by 358 domestically and 420 globally.

The acquisition triples its roasting capacity, but Gloria Jean’s will retain its usual coffee blends and flavours.

"Each of our Brand Systems has a specific, unique blend which does differ," he said.

"Our capacity to deliver … unique coffee flavour profile further strengthens opportunities for differentiation between brands."

Retail Food Group is buying the intellectual property rights to the Gloria Jean’s and It’s a Grind brands, and will be the operational manager of the business in Australia and the US.

It will also take ownership of its wholesale coffee roasting operations in Australia and the US, and will be the franchisor of the business in 40 countries.

"We have recognised the opportunity to capitalise on coffee excellence, while also expanding into freshly prepared food lines as major elements to drive franchisee sales," Mr Alford said

The transaction is expected to be completed by December.

The group is seeking to raise $40m to help fund the purchase via a placement through the issue of 8.3m shares at $4.80 each.