MONTREAL, Oct. 31, 2018 /CNW Telbec/ - MTY Food Group
Inc. ("MTY" or the "Company") (TSX: MTY) announced today that one
of its wholly-owned subsidiaries has signed an agreement to acquire
most of the assets of Casa Grecque (www.casagrecque.ca), a
chain of bring-your-own-wine restaurants founded 38 years ago by
brothers, Peter and Louis Berlemis.
The Casa Grecque network currently has 31 franchised restaurants
in operation, all of which are located in Quebec, Canada. The network has generated
over $45 million in system sales in
2017. Assets acquired also include a central kitchen and a
distribution center that service the Casa Grecque restaurants as
well as some external customers.
Total consideration for the transaction is expected to be
approximately $19.5 million plus the
value of the inventory at closing, which is projected to be
approximately $3 million.
The transaction is anticipated to close before the end of 2018
but remains subject to multiple conditions customary for a
transaction of this nature. There is no assurance the
transaction will be completed as described above, or at all, or
that the anticipated closing date will materialize.
The acquisition of Casa Grecque will solidify MTY's position in
casual dining and will complement the current offering in the
bring-your-own-wine category, family type of restaurant.
Following the closing of the transaction, MTY will continue to
run the Casa Grecque concept from its current headquarters in
Laval, Quebec, under the
leadership of Peter Mardakis.
Financing
Total consideration for the transaction will be financed using
MTY's cash on hand and existing credit facilities.
Non‑IFRS Measures
This News Release makes reference to certain non‑IFRS measures.
These measures are not recognized measures under IFRS, do not have
a standardized meaning prescribed by IFRS and are therefore
unlikely to be comparable to similar measures presented by other
companies. Rather, these measures are provided as additional
information to complement those IFRS measures by providing further
understanding of the Company's results of operations from
management's perspective. Accordingly, they should not be
considered in isolation nor as a substitute for analysis of the
Company's financial information reported under IFRS. The Company
uses non-IFRS measures including "System Sales" to provide
investors with supplemental measures of its operating performance
and thus highlight trends in its core business that may not
otherwise be apparent when relying solely on IFRS financial
measures. The Company also believes that securities analysts,
investors and other interested parties frequently use non-IFRS
measures in the evaluation of issuers. The Company's management
also uses non-IFRS measures in order to facilitate operating
performance comparisons from period to period, to prepare annual
operating budgets, and to determine components of management
compensation.
"System Sales" represents the net sales received from restaurant
guests at both corporate and franchise restaurants including
take-out and delivery customer orders. System Sales includes sales
from both established restaurants as well as new
restaurants. Management believes System Sales provides
meaningful information to investors regarding the size of MTY's
restaurant network, the total market share of the Company's brands
and the overall financial performance of its brands and restaurant
owner base, which ultimately impacts MTY's consolidated financial
performance.
Forward looking information
Certain information in this News Release constitutes
"forward-looking" information that involves known and unknown
risks, uncertainties, future expectations and other factors which
may cause the actual results, performance or achievements of the
Company to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking information. When used in this News Release,
this information may include words such as "anticipate",
"estimate", "may", "will", "expect", "believe", "plan" or
variations of such words and phrases, or by the use of words or
phrases which state that certain actions, events or results may,
could, would, or might occur or be achieved. In particular,
this News Release contains forward-looking information regarding:
the completion of the acquisition, the potential closing date of
the acquisition and the potential impact of the acquisition on the
Company's future operations; opportunities, growth and expansion;
the suitability of the acquisition by the Company; the effect of
the acquisition on Casa Grecque stakeholders; the potential
retention of Casa Grecque management team; the expected EBITDA,
revenue, system sales and potential growth of the combined entity;
potential future acquisition opportunities; and the continuing
payment of dividends by the Company. This forward-looking
information reflects current expectations and assumptions regarding
future events and operating performance and speaks only as of the
date of this News Release. These assumptions include, but are
not limited to: currency exchange rates used to derive Canadian
dollar expectations; market acceptance of the acquisition; the
satisfactory fulfilment of all of the conditions precedent to the
acquisition; the receipt of all required approvals and consents
including regulatory, TSX, shareholder and any other approvals;
acceptable financing to complete the acquisition; future results of
the Casa Grecque business and operations meeting or exceeding
historical results; the success of the integration of the
operations and management team with the Company's operations and
business; and market acceptance of potential future acquisitions by
the Company. Forward-looking information is subject to known
and unknown risks, uncertainties and other factors that may cause
the actual results, level of activity, performance or achievements
of the Company to be materially different from those expressed or
implied by such forward-looking information. Such risks and other
factors may include, but are not limited to: currency exchange
rates, general business, economic, competitive, political, capital
market and social conditions and uncertainties; the intensity of
competitive activity, and the resulting impact on our ability to
attract customers' disposable income; our ability to secure
advantageous locations and renew our existing leases at sustainable
rates; the arrival of foreign concepts; our ability to attract new
franchisees; changes in customer tastes, demographic trends and in
the attractiveness of our concepts, traffic patterns, occupancy
cost and occupancy level of malls and office towers; the level of
consumer confidence and spending and the demand for, and prices of,
our products; our ability to implement our strategies and plans in
order to produce the expected benefits; events affecting the
ability of third-party suppliers to provide to us essential
products and services; labour availability and cost or the loss of
key individuals; stock market volatility; operational constraints
and the event of the occurrence of epidemics, pandemics and other
health risks; delay or failure to receive board or regulatory
approvals; changes in legislation affecting the
Company. Expected EBITDA, revenue, system sales and
growth could vary due to fluctuations in currency exchange
rates.
A description of additional assumptions used to develop such
forward-looking information and a description of additional risk
factors that may cause actual results to differ materially from
forward-looking information can be found in the disclosure
documents on the SEDAR website at www.sedar.com. Readers are
further cautioned not to place undue reliance on forward-looking
information as there can be no assurance that the plans, intentions
or expectations upon which they are placed will
occur. Forward-looking information contained in this News
Release is expressly qualified by this cautionary
statement. Except as required by law, the Company assumes no
obligation to update or revise forward-looking information to
reflect new events or circumstances. Financial outlooks
contained in this News Release were approved by management of the
Company on October 30, 2018. The
purpose of this information is to provide a potential financial
outlook of the combined entity and this information may not be
appropriate for other purposes. Additional information is
available in the Company's Management Discussion and Analysis,
which can be found on SEDAR at www.sedar.com.
On Behalf of the Board of Directors of
MTY Food
Group Inc.
________________________________
Stanley Ma, Chairman, President
& CEO
SOURCE MTY Food Group Inc.