Signature Hospitality Group, which owns The Sporting Globe and TGI Fridays brands in Australia, has entered into an agreement to acquire Varsity Group (Varsity).

Varsity has grown from its first American college themed “frat-style” bar opened in Nedlands February 2013, to be Perth’s number one sports and burger joint. Today, the business boasts seven large format venues, with an eighth already under construction, and employs in excess of 300 people. The deal would bring Signature Hospitality’s venue total in Western Australia to fourteen.

Varsity Group director Ben Maher told Australian Hotelier that the group had not been planning on selling, but instead was preparing the business to take on a partner that could facilitate growth. But after meeting the Signature Hospitality team, the acquisition deal made sense.

“This partnership is a win for all parties, and we are excited and confident that under Signature’s ownership, Varsity will experience significant growth and be in a strong position to capitalise on new opportunities,” stated Maher.

For Signature Hospitality owner James Sinclair, the commonalities between the two businesses were obvious. All three brands – Varsity, The Sporting Globe and TGI Fridays – are built around American-style casual hospitality, but the synergies go further than that.

“We’ve admired the Varsity brand for a long time. It’s got a cult following in Western Australia being born and bred there, a really strong youth appeal, and we think their execution has been fabulous to date. The synergies of course are not just about supply chain, which are obvious, we’re both buying similar lines and are casual American themed venues,” states Sinclair.

“But of course we also both have loyalty programs and the synergies across the tech side; we’re developing sites so again synergies through build and development; and then of course one of the things we’re really excited about is to help support Varsity through a growth period, having been through the growth stages before with some process, systems and know-how to see them get to the next level.”

The growth resources and know-how were a big part of the appeal for Maher and his team.

“Having gone through a much smaller growth phase ourselves and looking at the challenges that we faced, knowing that Signature have been through that on a much larger scale and being able to take on those learnings without having to learn them the hard way as we had done previously [was appealing].”

As part of the acquisition agreement, Maher and the other Varsity founders will stay on in the management team for at least the next three years, with Signature providing support and resources throughout the brand’s expansion.

Varsity Group directors (l-r) Matt Pound, Fabian Bucher and Ben Maher.

“For us its business as usual, and we’re afforded an opportunity to lean on Signature and James where we need the help and support as well as embrace whatever Signature can offer — specifically the tech side that Signature is heavily invested in, whether it’s the customer loyalty app or analytics. [It’s] a level of sophistication that I hadn’t come across in hospitality before, and I know our team is incredibly excited.”

Sinclair said he is happy to welcome Varsity personnel into the Signature umbrella.

“The team that Ben and the other founders have put together is absolutely fantastic and it was key for us to keep those guys on and keep the business moving forward successfully. We feel really good about all of the people at Varsity continuing with the business and helping it grow over the coming years.”

Signature Hospitality Group owner James Sinclair in a The Sporting Globe venue.

Expansion of the Varsity footprint is on the agenda as part of the acquisition, with Maher and his team having identified another five large-format sites in Western Australia, starting with an Innaloo location to open at the end of the year. Meanwhile, an extensive renovation and expansion of Varsity Morley has been completed, and will reopen next week. Long-term, Signature Hospitality will look to expand the brand into interstate markets.

“Ben and the team have looked extensively through WA and we’ve got a core focus of expansion there, but of course we’ve got a footprint nationally so long-term as opportunities arise there’s no question we would love to see the brand find a home in other parts of Australia,” stated Sinclair.

With the acquisition of Varsity Group, Signature Hospitality now operates almost 50 venues across the country, with revenue in excess of $200 million.

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