MONTREAL — MTY Food Group Inc. has acquired all shares of Kahala Brands, Ltd. for approximately US$310 million — including US$240 million cash — pursuant to the previously announced merger. However, this is subject to post-closing working capital adjustments.
Sources of funds include the issuance of 2,253,930 shares of MTY Food Group Inc. to the sellers, $30 million of MTY’s cash-on-hand and the remainder coming from MTY’s new $325 million credit facilities.
At closing, Kahala operates 18 brands in 27 countries, totalling approximately 2,800 locations. The combined entity is expected to produce over $2 billion annually in system sales generated by approximately 5,500 franchised and corporate locations.
“This is a turning point in MTY’s history,” says Stanley Ma, CEO of MTY. “MTY now has a solid, profitable and scalable platform from which to grow its U.S. and international operations. Moreover, a sizeable, dynamic and talented group of employees is now joining the MTY family. This transactions opens the door to endless opportunities for MTY and its shareholders.”
Kahala operations will stay in Kahala’s current headquarters in Scottsdale, Ariz., while MTY’s U.S. operations will move into Kahala’s offices. Jeff Smit, Kahala’s COO, will be leading the U.S. operations of the combined entity.