Pace buying gourmet brand Dean & DeLuca

Pace Development Corporation, a developer of super-premium mixed-use projects, is acquiring Dean & DeLuca, of one of the world’s most iconic gourmet food brands, for US$140 million (Bt4.55 billion).

The move is expected not only to boost Pace’s capabilities as a luxury developer but also to fuel rapid growth of Dean & DeLuca’s global gourmet food-and-beverage retailing business.

Besides the brand, the purchase includes the supply chain and operations of 11 outlets and two commissaries in the United States and licensing agreements in 31 international locations. 

Besides the four outlets in Thailand, there are international branches in Japan, Singapore, South Korea, Kuwait, Qatar and the United Arab Emirates.

Sorapoj Techakraisri, chief executive officer of Pace, said yesterday that the company aimed to capitalise on the global convergence of super-premium mixed-use property development and “lifestyle brands”. 

The high margins in the business of premium property development of the future will be in offering customers a lifestyle – not just bricks and mortar. 

“People want a total delivered environment where they feel good about living. It’s why we must be able to bring into our properties some of the world’s best lifestyle brands. It’s a proven model already being successfully deployed by thought-leaders in  [residential] and retail property development,” he said.

The Dean & DeLuca brand also has “extraordinary potential for rapid growth globally”. 

“We expect to have stores numbering in the hundreds within only two years, up from the current 42 stores, and to increase our global footprint from eight countries at present to more than 15 countries in the same time, primarily through licensing and the company’s own-store investment,” he said. Dean & DeLuca is one of the world’s great brands, while the business has a well-established track record of almost 40 years, Sorapoj said. 

The approach of the Asean Economic Community creates major opportunities for Thailand-based companies. Companies must go global to protect their business from the greater regional competition that will come with the arrival of the AEC, he said.

The acquisition strengthens Pace by generating another sustainable revenue stream that is less cyclical than property development and less prone to external economic shocks, Sorapoj said. It will also boost the company’s ability to attract and retain the best talent by raising the ceiling on staff’s career-growth prospects within the group.

The funding for the acquisition is from internal cash flow and a loan from Siam Commercial Bank, he said.

Arthid Nanthawithaya, senior executive vice president for SCB, said the bank was excited by the enormous global prospects for this visionary Thai company and was pleased to support its customer in this important endeavour. 

The deal highlights the bank’s leading franchise in mergers and acquisitions, extensive industry knowledge and expertise in structuring and executing deals, he said. The bank has always striven to provide for customers’ every financial need and is strongly committed to maximising customer satisfaction as a total-solution financial partner.

Pace is also increasing to 100 per cent its ownership of its flagship MahaNakhon mixed-use mega-project and related businesses through a share swap with Industrial Buildings Corporation. IBC will be taking a 20.9-per-cent holding in Pace in exchange for its holdings in MahaNakhon and related businesses.