Food court champion sinks teeth into U.S.

With the patience of a hungry customer who carefully looks over the restaurants at a food court before ordering a meal, MTY Food Group Inc. has acquired the Arizona-based Kahala Brands Ltd. franchise company, which will finally bring it into the U.S. market in a significant way.

MTY has been looking to grow, and on Wednesday the Montrealbased company announced it has paid US$300 million for Kahala in a friendly deal that will add 18 brands to its current 30 restaurant banners, familiar to just about anyone who has been to a mall or airport across Canada, including Mr. Sub, Thai Express and Jugo Juice.

“The two companies share the same philosophy, the same platform and same background. I think it’s the perfect fit,” said MTY founder and CEO Stanley Ma in an interview with the Financial Post, adding that the headquarters will be staying in the Montreal area.

“Most of the time these days it’s a U.S. company buying a Canadian company,” Ma said. “This is good news for Quebec.” About US$240 million of the price will be paid in cash and the rest with 2.25 million MTY shares to acquire Kahala and its brands, including Cold Stone Creamery, America’s Taco Shop and Kahala Coffee Traders.

At the moment, MTY has just 80 stores in the U.S., but with the Kahala banners it will add close to 2,000 when the deal closes.

Ma wouldn’t say whether any of the existing Kahala brand locations would be transitioned to MTY brand locations.

Ma started his first restaurant, Le Paradis du Pacifique, in 1979 with a single location in Laval, Que.