VANCOUVER, BC, Oct. 17,
2024 /CNW/ - A&W Revenue Royalties Income Fund
(the "Fund") and A & W Food Services of Canada Inc. ("A&W
Food Services") are pleased to announce the successful closing of
the strategic combination (the "Transaction") between the Fund and
A&W Food Services to create a leading publicly traded
growth-focused quick-service restaurant ("QSR") franchisor
("A&W Food Services NewCo"). A&W Food Services NewCo offers
a compelling new investment opportunity supported by a more
conventional capital structure that can be leveraged to finance
growth initiatives. With this transaction complete, shareholders
will have the opportunity to fully capitalize on the many catalysts
driving this Canadian success story while continuing to benefit
from the experience and track record of the current leadership team
and attractive quarterly dividend.
"The creation of a new public QSR company marks an exciting step
in our journey to unlock even greater restaurant success and bring
the great taste of A&W to even more Canadians," said
Susan Senecal, President and Chief
Executive Officer of A&W Food Services NewCo and the Fund. "The
transaction will enable us to go forward as an even stronger
company, positioned for long-term growth and value."
The Transaction received overwhelming support from the Fund's
unitholders at a special meeting held on October 8, 2024, and received final court
approval on October 11, 2024.
As a result of the Transaction, the Fund units will be delisted
from the Toronto Stock Exchange ("TSX") as of close of business
today. The common shares of A&W Food Services NewCo (the
"A&W Food Services NewCo Shares") will begin trading on the TSX
under the symbol "AW" on October 18,
2024.
Registered unitholders of the Fund are reminded that, in order
to receive the consideration under the Transaction in exchange for
their units of the Fund and a distribution of $0.10520 per unit (the "Accrued Distribution"),
representing the Fund's regular monthly distribution for October
prorated for the number of days to closing of the Transaction, they
must complete, sign and return the letter of transmittal and
election form to Computershare Investor Services Inc., in its
capacity as depositary under the Transaction, together with the
certificate(s) or direct registration statement(s) representing
their units of the Fund. Unitholders who have questions or require
more information with respect to completing the letter of
transmittal and election form should contact Laurel Hill Advisory
Group by telephone at 1-877-452-7184 (North American Toll Free) or
1-416- 304-0211 (Outside North America), or by email at
assistance@laurelhill.com.
Non-registered unitholders of the Fund should receive the
consideration to which they are entitled under the Transaction and
the Accrued Distribution directly in their brokerage accounts.
Non-registered unitholders of the Fund should contact their broker
or other intermediary if they have any questions or require further
information regarding the procedures for receiving the
consideration to which they are entitled under the Transaction and
the Accrued Distribution.
About A&W Revenue Royalties Income Fund
A&W Revenue Royalties Income Fund is a limited purpose trust
established to invest in A&W Trade Marks Inc. ("Trade Marks"),
which, through its interest in A&W Trademarks Holdings Inc.
("Trademarks Holdings"), owns the A&W trade-marks used in the
A&W QSR business in Canada.
The A&W trade-marks comprise some of the best-known brand names
in the Canadian foodservice industry. In return for licensing
A&W Food Services NewCo to use its trade-marks, Trade Marks
(through Trademarks Holdings) is entitled to royalties equal to 3%
of the gross sales reported by A&W restaurants in the Royalty
Pool.
About A&W Food Services NewCo
A&W Food Services NewCo is a leading QSR and the second
largest burger chain in Canada
with a 68-year history of service excellence, menu innovation and
value creation. Operating coast-to-coast and serving over 197
million guests annually, A&W restaurants feature famous
trade-marked menu items such as The Burger Family®, Chubby Chicken®
and A&W Root Beer®.
® trademark of A&W Trademarks Holdings Inc., used under
license.
Forward-looking Information:
Certain statements in this press release contain forward-looking
information within the meaning of applicable securities laws in
Canada. The forward-looking
information in this press release includes, but is not limited to:
statements relating to the delisting of the Fund units from the TSX
and the listing of the A&W Food Services NewCo Shares on the
TSX, and the expected benefits of the Transaction including,
without limitation, expectations with respect to A&W Food
Services NewCo's potential for growth and value creation. The word
"will" and similar expressions are often intended to identify
forward-looking information, although not all forward-looking
information contains these identifying words.
This forward-looking information is based on a number of
assumptions that, while considered reasonable as of the date such
statements are made, are subject to known and unknown risks,
uncertainties and other factors that may cause the actual results
to be materially different from those expressed or implied by such
forward-looking information. Such assumptions include, but are
not limited to the assumption that A&W Food Services NewCo will
be successful in executing its business strategies and pursuing its
growth opportunities.
Inherent in forward-looking information are risks and
uncertainties beyond the Fund's and A&W Food Services NewCo's
ability to predict or control that may cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements expressed or implied by
the forward-looking information. The forward-looking information in
this press release is subject to, among others, the specific risks
and uncertainties relating to the expected benefits of the
Transaction set out in the Fund's management discussion and
analysis for the third quarter period from June 17, 2024 to September
8, 2024 (the "MD&A") under "Risks and Uncertainties", in
addition to the other information contained, or incorporated by
reference, in the MD&A. The MD&A can be accessed under the
Fund's issuer profile on SEDAR+ at sedarplus.ca. Readers are
cautioned that the risk factors referred to above are not
exhaustive and additional risks and uncertainties, including those
currently unknown or considered immaterial to A&W Food Services
NewCo or the Fund may also adversely affect A&W Food Services
Newco. There can be no assurance that forward-looking information
contained in this press release will prove to be accurate, as
actual results and future events could differ materially from those
anticipated in such statements. Accordingly, readers should not
place undue reliance on forward-looking information.
The forward-looking information contained in this press release
is based on the beliefs of A&W Food Services NewCo's and the
Fund's management as well as on assumptions which such management
believes to be reasonable based on information available at the
date hereof and is subject to change after such date. All
forward-looking information in this press release is qualified in
its entirety by this cautionary statement and, except as required
by law, A&W Food Services NewCo and the Fund and undertake no
obligation to revise or update any forward-looking information as a
result of new information, future events or otherwise after the
date hereof.
Early Warning Disclosure Relating to the Fund
Prior to closing of the Transaction, A&W Food Services NewCo
had ownership and control over an aggregate of 1,507,020 limited
voting units of the Fund ("LVUs"), and common shares of a
subsidiary of the Fund ("Exchangeable Securities") which are
exchangeable for an aggregate of 4,562,957 LVUs. Assuming the
exchange of the Exchangeable Securities into LVUs, prior to closing
of the Transaction, A&W Food Services NewCo had ownership and
control over an aggregate of 6,069,977 LVUs, representing
approximately 29.4% of the outstanding voting securities of the
Fund.
As part of the Transaction, A&W Food Services will
amalgamate with Buddy Holdings Inc., A&W Holdings I Inc.,
A&W Holdings II Inc., A & W of Canada Inc. and AWFS
Holdings Inc. to form A&W Food Services NewCo. Following
completion of the Transaction, A&W Food Services Newco will
own, directly or indirectly, 100% of the issued and outstanding
voting securities of the Fund, and intends to cause the Fund to
submit an application to cease to be a reporting issuer under
applicable Canadian securities laws and to otherwise terminate the
Fund's public reporting requirements.
Both the Fund's and A&W Food Services NewCo's head office is
located at Suite 300, 171 West Esplanade, North Vancouver, British Columbia V7M 3K9.
An early warning report will be filed by A&W Food Services
NewCo with applicable Canadian securities regulatory authorities.
To obtain copies of the early warning report, please contact
investorrelations@aw.ca.
Early Warning Disclosure Relating to A&W Food Services
NewCo
Pursuant to the Transaction, Jefferson
Mooney and David Mindell
directly and/or indirectly will receive 149,637 and 65,320 A&W
Food Services NewCo Shares, respectively, in consideration for
units of the Fund which they held directly and/or indirectly prior
to closing representing approximately 0.62% and 0.27% of the issued
and outstanding A&W Food Services NewCo Shares, respectively,
as of closing. Immediately prior thereto, Jefferson Mooney and David Mindell each directly and/or indirectly
owned or controlled 2,853,065 A&W Food Services NewCo Shares.
Following closing of the transaction, Jefferson Mooney and David Mindell will directly and/or indirectly
own 3,002,702 and 2,918,385 A&W Food Services NewCo Shares,
respectively, representing 12.51% and 12.16% of the issued and
outstanding A&W Food Services NewCo Shares, respectively, as of
immediately following the closing.
An early warning report will be filed by each of Jefferson Mooney and David Mindell with applicable Canadian
securities regulatory authorities. To obtain copies of such early
warning reports, please contact investorrelations@aw.ca.
SOURCE A&W Revenue Royalties Income Fund