When the transaction closes, the company will have nearly 7,000 locations and system sales of more than $3.8 billion.
MTY Food Group announced Tuesday a $200 million deal to acquire Famous Dave's parent BBQ Holdings.
BBQ Holdings has expanded to nine casual and fast-casual restaurants through a series of M&A moves in recent years. The portfolio now includes Famous Dave's, Village Inn, Granite City, Bakers Square, Real Urban BBQ, Tahoe Joe's, Barrio Queen, Craft Republic Bar & Grill, and Champps Kitchen + Bar. The company operates more than 200 franchised and 100 corporately owned locations in 37 states, Canada, and United Arab Emirates.
Canada-based MTY Food Group, one of the largest franchisors in the North American restaurant industry, oversees more than 80 casual-dining, fast-casual, and quick-service concepts across Canada, the U.S., and around the world. All of those restaurants combine for about 6,660 locations. Some of the more notable brands in the portfolio include Baja Fresh, TCBY, Blimpie, Coldstone, Pinkberry, Papa Murphy's, and Sweetfrog.
“This transaction represents another key acquisition for MTY as we further scale and enhance our existing U.S. portfolio through the addition of nine unique brands. The transaction combines highly complementary businesses, including BBQ Holdings’ exciting casual and fast casual brands," MTY CEO Eric Lefebvre said in a statement. "BBQ Holdings’ restaurants are well established within each of their respective markets with a strong network of franchise partners, well-run corporate owned locations, and a best-in-class management team. We are excited about the prospects of adding BBQ Holdings’ brands to the MTY family and we look forward to welcoming Jeff Crivello and his team and their franchise partners."
When the purchase closes, MTY will have roughly 7,000 units, including more than 3,900 in the U.S. System sales are expected to exceed $3.78 billion, representing a 23 percent increase. Also, the mix of U.S. sales will grow from 58 percent to 66 percent. Casual dining and fast casual will represent 43 percent of sales, up from the current 29 percent.
“We are thrilled to partner with MTY and its talented team of restaurant operators," BBQ Holdings CEO Jeff Crivello said in a statement. "Over the past four years we have significantly grown revenue and our restaurant portfolio while building a world-class team of entrepreneurs. We look forward to continuing the execution of our three pillars of growth, which we believe align very closely with MTY’s vision. With more than 80 brands, MTY brings vast buying power and a team of industry leaders who will provide additional support to our franchise partners. As our founder Dave Anderson says, we strive to deliver famous experiences with our ‘yes is the answer, what’s the question’ hospitality.”
MTY is purchasing all of BBQ Holdings' outstanding stock for $17.25 per share. When the transaction closes in Q4, BBQ Holdings will be de-listed from Nasdaq and the company will become a privately held subsidiary under MTY.
The transaction has been unanimously approved by the board of directors of MTY and has the unanimous support of the BBQ Holdings board of directors. National Bank Financial Inc. is acting as sole financial advisor to MTY and Morrison & Foerster LLP is acting as its legal advisor. Kroll, LLC is acting as financial advisor to BBQ Holdings and Dentons Sirote PC and Lathrop GPM LLP are acting as its legal advisors.