MONTREAL — MTY Food Group Inc. and Imvescor Restaurant Group Inc. have entered into a definitive combination agreement under which a wholly owned subsidiary of MTY will acquire all of the outstanding Imvescor common shares for $4.10 per Imvescor share — representing a total consideration of approximately $248 million.
“We are extremely excited about today’s announcement. We’re happy that Imvescor shareholders will become important shareholders of MTY,” said Eric Lefebvre, CFO of MTY, during a conference call highlighting the transaction. “MTY will be better positioned to grow in the increasingly competitive environment in the North American restaurant industry. This is a very strong platform for continued expansion.”
Under the terms of the transaction, Imvescor shareholders will receive an aggregate consideration, which will consist of approximately 20 per cent in cash and approximately 80 per cent in MTY common shares. The purchase price per Imvescor share implies a premium of 13.3 per cent to the unaffected 10-day volume-weighted average price on Oct. 26, 2017 (the day prior to Imvescor’s press release regarding its receipt of a non-binding indication of interest from a third party).
François-Xavier Seigneur, chairman of the board of directors of Imvescor, noted negotiations for this transaction took place over the course of several weeks. “We did not come to this decision lightly. We have carefully considered the merits of this transaction against other strategic alternatives for value creation available to us, including discussions with many other parties,” he explained.
“Joining forces with MTY creates an opportunity for Imvescor shareholders to realize immediate value and participate in a faster pace of growth, with less risk,” said Seigneur. “Today’s transaction fully recognizes the value of our portfolio of restaurant brands and rewards investors for their patience as we have successfully executed our turnaround strategy.”
Stanley Ma, president and CEO of MTY, indicated the company intends to continue the ongoing reimaging of Imvescor’s brands. “MTY will likely maintain the same path of what Imvescor has been doing for the last few years,” he explained. “Our intention is to make sure the franchise system and network are going in the right direction. Right now, they are looking quite solid and we are happy to continue that path. We will make adjustments down the road if necessary.”
The combined force of the two companies will result in a portfolio consisting of 75 brands and more than 5,700 locations across North America. The addition of Imvescor’s brands will significantly grow MTY’s stake in the full-service-restaurant segment.
Ma also pointed to Imvescor’s retail portfolio and strong presence in the Maritime Provinces as key attributes that will help strengthen the position of MTY. “There is a lot of synergy and in-house expertise that MTY will be able to learn from the Imvescor team to strengthen the MTY retail [business],” he said.
The agreement is subject to customary closing conditions, including receipt of regulatory and Imvescor shareholder approvals. The transaction will be structured as an amalgamation and will be subject to the approval of 66.66 per cent of the votes cast by Imvescor shareholders at the special meeting slated for February 2018. Assuming approval from Imvescor shareholders, the transaction is expected to close in March 2018.