MTY Food to ac­quire The Counter, Built Cus­tom Burg­ers

Stockwatch Daily - - CONSUMER SERVICES & CURRENT EVENTS - Mr. Stan­ley Ma re­ports

ONE OF MTY Food Group Inc.’s wholly owned sub­sidiaries has signed an agree­ment to ac­quire all of the limited li­a­bil­ity com­pany in­ter­ests in CB Fran­chise Sys­tems LLC (The Counter), Built Fran­chise Sys­tems LLC (Built Cus­tom Burg­ers) and cer­tain of their af­fil­i­ates.

Stan­ley Ma, chair­man of the board and chief ex­ec­u­tive of­fi­cer of MTY, said: “Since the ac­qui­si­tion of Ka­hala Brands in July, 2016, MTY has been seek­ing po­ten­tial ad­di­tions to its strong port­fo­lio of brands. The Counter and Built fit that per­fectly, of­fer­ing trendy ham­burg­ers and other crave­able foods to un­com­pro­mis­ing cus­tomers, fo­cus­ing on su­pe­rior qual­ity and spot-on ex­e­cu­tion, cre­at­ing mem­o­rable ex­pe­ri­ences for its guests.” Trans­ac­tion and ra­tio­nale The Counter and Built net­works cur­rently com­bine for 41 fran­chised lo­ca­tions and three cor­po­rate-owned lo­ca­tions. Of those 44 restau­rants, 34 are lo­cated in the United States, one is lo­cated in Canada and nine are lo­cated over­seas. In the last 12 months, the com­bined net­works gen­er­ated over $81-mil­lion (U.S.) in sys­tem sales.

The ac­qui­si­tion of The Counter and Built rep­re­sents an­other ma­jor mile­stone for MTY as it so­lid­i­fies its pres­ence in the United States and con­firms MTY’s ap­petite for good-qual­ity ac­qui­si­tion op­por­tu­ni­ties.

Fol­low­ing the clos­ing of the trans­ac­tion, the head of­fice of The Counter and Built will be moved from its cur­rent lo­ca­tion in Cul­ver City, Calif., to MTY’s of­fice in Scotts­dale, Ariz.

Con­di­tions and reg­u­la­tory ap­provals

The agree­ment is bind­ing but re­mains sub­ject to mul­ti­ple clos­ing con­di­tions cus­tom­ary for a trans­ac­tion of this na­ture. Fi­nanc­ing

To­tal con­sid­er­a­tion for the trans­ac­tion will be fi­nanced us­ing MTY’s cash on hand and ex­ist­ing credit fa­cil­i­ties. Clos­ing of the trans­ac­tion The clos­ing of the trans­ac­tion is ex­pected to oc­cur in De­cem­ber, 2017. How­ever, there is no as­sur­ance the trans­ac­tion will be com­pleted on such time­line or at all.

We seek Safe Har­bor.

Mu­rat Ar­mutlu, Stan­ley Ding Kwok Ma, Dickie Lok Tor Orr, Claude St-Pierre, David Keith Wong

(MTY) Shares: 21,374,497

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