MONTREAL — MTY Food Group Inc. announced that one of its subsidiaries has signed an agreement to acquire 80 per cent of the assets of Houston Avenue Bar & Grill and Industria Pizzeria + Bar.
There are currently nine franchised Houston restaurants and three franchised Industria restaurants in operation — one in Ontario and 11 in Quebec. There are also three new locations under construction that are set to open during 2017; one for Houston and two for Industria. The combined networks of the two brands have generated approximately $38 million in sales during the last twelve months.
“This is another great addition to MTY’s portfolio of brands,” says Stanley Ma, Chairman of the Board and CEO of MTY. “Both brands are young and trendy, offer exceptional food and benefit from remarkable leadership. The combination of great food and atmosphere makes the two brands’ growth potential very tangible.”
The cash consideration paid at closing for the 80 per cent acquired by MTY is expected to be approximately $13 million. The consideration will be adjusted 24 months from closing based on the performance of three of the recently opened restaurants and of the three restaurants that are currently under construction (the”earn-out”). The amount of the earn-out will also serve as a holdback for the transaction.
Raimondo Messina, Antonino Messina and Roger Francis, the current owners of Houston and Industria, will continue to lead the two brands following the transaction. MTY expects to relocate the offices of the Houston and Industria to its headquarters in St-Laurent, Que.
The transaction is expected to close within the next 15 days and remains subject to multiple conditions, including standard regulatory approvals and other closing conditions.