Cara to Merge with Keg Restaurants Ltd.


VAUGHAN, Ont. — Cara Operations Limited and Keg Restaurants Ltd. (KRL) have agreed to a $200-million merger deal, pursuant to the terms of a binding letter of intent.

Under the transaction, Cara will pay KRL’s shareholders, Fairfax Financial Holdings Limited and KRL president and CEO, David Aisenstat, an aggregate purchase price of $200 million comprised of $105 million in cash and 3,801,123 Cara subordinate voting shares. In addition, Cara may be required to pay up to an additional $30 million of cash consideration upon the achievement of certain financial milestones within the first three fiscal years following closing.

As part of the merger agreement, Aisenstat — who has lead the brand for the last 20 years — will assume oversight of Cara’s higher-end casual brands, namely The Bier Markt, the Landing Group and Milestones restaurants. Aisenstat will remain in his current position while overseeing the three additional Cara brands. He will also join the Cara board of directors as vice-chairman.

Cara and KRL have confirmed to The Keg Royalties Income Fund that, notwithstanding the merger, The Keg will continue to operate as it has previously under Aisenstat’s leadership.

The addition of 106 The Keg restaurants will boost Cara’s restaurant portfolio to 1,365 restaurants. The merger is expected to result in synergistic opportunities in marketing, real estate and overall costs that will help further grow the Keg and Cara brands.

Cara intends to change its corporate name to reflect this new business composition following the closing of the transaction, which is expected to occur during Cara’s current reporting quarter.

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