The publicly listed owner of the Bedshed franchise plans to move into the kitchen renovation business by taking a majority stake in a Queensland-based retailer.
Joyce Corporation has signed a heads of agreement to invest in the privately-owned KWB Group, which trades under the retail brands Kitchen Connection and Wallspan Kitchens and Wardrobes.
Under the deal - subject to due diligence - Joyce would take a stake of at least 51 per cent through the conversion of secured convertible notes over a six-month period.
KWB operates 12 retail outlets in the Eastern States and has consolidated forecast sales of $26 million for this financial year.
Joyce executive director Anthony Mankarios said the retailer was a mid-tier operator in the kitchen installation market and planned to franchise its brands nationally.
He said KWB, owned by Michael Bourke and Chris Palin, was a market leader in its territories.
"We've been looking for a retail business that's got the ability to franchise because that's our background," Mr Mankarios said.
"Our expertise is in franchising and given our background in retailing they thought we were a very good fit. We think it's a very good opportunity."
Mr Mankarios said through its experience with Bedshed, Joyce could provide KWB with expertise and knowledge of the best retail centres for kitchen showrooms.
"The business has the potential to grow nationally very quickly and become part of our stable of businesses that we inevitably own."
He said there would be no adverse impact on Bedshed franchisees from the move.
Joyce posted a $3 million net profit last financial year. It is 32 per cent owned by chairman Dan Smetana and has property interests in NSW.