MTY adds to Que­bec fast-food hold­ings

Groupe Valen­tine may en­ter On­tario

National Post (Latest Edition) - - FINANCIAL POST - BY NICOLAS VAN PRAET

MON­TREAL • MTY Food Group Inc. has tight­ened its grip on Que­bec’s fast-food in­dus­try with the planned pur­chase of hot­dog and pou­tine re­tailer Groupe Valen­tine Inc. and may be weigh­ing an ex­pan­sion into On­tario.

Mon­treal-based MTY said its sub­sidiary Tiki Ming En­ter­prises Inc. has en­tered into a bind­ing agree­ment to ac­quire all of the is­sued shares of Valen­tine and seven real es­tate prop­er­ties owned by an af­fil­i­ate for $9.3-mil­lion in cash. The deal is ex­pected to close in Septem­ber.

MTY chair­man Stan­ley Ma has been gob­bling up quick­ser­vice chains in the prov­ince in re­cent years, adding dough­nut re­tailer Coun­try Style, Taco Time and Sushi Shop to his sta­ble of brands, which in­cludes Cul­tures, Sukiyaki and La Crémière.

In tak­ing over Valen­tine, he gets a well-known maker of Que­bec com­fort food that’s been in busi­ness since 1979. Head­quar­tered in Sain­tHy­acinthe, east of Mon­treal, its stores are largely in ru­ral lo­ca­tions around the prov­ince.

“There’s a fit in that Valen­tine is lo­cated in strate­gic and ge­o­graph­i­cal re­gions where MTY is not cur­rently present,” said MTY spokesman JeanFrançois Dubé. “So they can ex­pand the other banners in ar­eas where Valen­tine is now. And they can mi­grate to On­tario. A name like Valen­tine fits well.”

MTY said it will take over Valen­tine’s 8,300-square-foot dis­tri­bu­tion cen­tre as part of the trans­ac­tion and may use the build­ing’s ex­cess ca­pac­ity.

MTY has a fast-food ham­burger and fries brand called Franx Supreme. Mar­keted as “the French Cana­dian food spe­cial­ist,” Franx is profitable but has not grown, Mr. Dubé said. He said both Franx and Valen­tine will be kept op­er­at­ing in the short term, al­though they could be con­sol­i­dated later.

Valen­tine has 95 stores, nine of which are cor­po­ra­te­owned, and an­nual sales of more than $29-mil­lion, MTY dis­closed.

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