MTY Food Group Inc.

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MTY enters into an agreement to acquire Baja Fresh Mexican Grill and La Salsa Fresh Mexican Grill

MTY enters into an agreement to acquire Baja Fresh Mexican Grill and La Salsa Fresh Mexican Grill

Canada NewsWire

TSX Trading Symbol: "MTY"

MONTREAL, Sept. 9, 2016 /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 all of the equity interest of BF Acquisition Holdings, LLC. ("BFAH") ( and

Stanley Ma, Chairman of the Board and Chief Executive Officer of MTY, said: "Following the addition of Kahala last month, MTY intends to continue and accelerate its growth throughout North America, leveraging both its US platforms and Canadian platforms to acquire profitable restaurant concepts.  The acquisition of Baja Fresh Mexican Grill and La Salsa Fresh Mexican Grill perfectly aligns with our growth strategy and is one more step towards building a bigger and better organization for the future."

Transaction and rationale

BFAH currently franchises and operates 162 Baja Fresh Mexican Grill ("Baja") and 23 La Salsa Fresh Mexican Grill ("La Salsa") restaurants in the USA, Dubai and Singapore. Of those 185 restaurants, 16 are corporately-owned and 169 are franchised. During 2015, the BFAH network generated over US$145 million in system sales.

The acquisition of Baja and La Salsa represents another major milestone for MTY as it solidifies its presence in the United States and confirms MTY's appetite for good quality acquisition opportunities regardless of the geographical location of their restaurants.

Following the transaction, BFAH's head office will be moved in MTY's office in Scottsdale, Arizona. The transition is expected to happen before the end of MTY's 2016 fiscal period.

Conditions and regulatory approvals

The agreement is binding but remains subject to multiple conditions, including standard regulatory approvals, financing and other conditions customary for a transaction of this nature.


Total consideration for the transaction is estimated at US$27 million in cash, to be financed using MTY's existing credit facilities. The final purchase price remains subject to customary working capital adjustments.

Closing of the transaction

The closing of the transaction is expected to happen within the next 30 days. There is no assurance the transaction will be completed as described above or at all, or that the anticipated closing date will materialize.

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" and "EBITDA" 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.

"EBITDA" is defined as net earnings (loss) from continuing operations before net interest expense and other financing charges, losses (gains) on derivative, income taxes, depreciation of property, plant and equipment, amortization of intangible assets, and impairment of assets, net of reversals.

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 BFAH acquisition, the potential closing date of the BFAH acquisition and the potential impact of the BFAH acquisition on the Company's future operations; opportunities, growth and United States expansion; the suitability of the BFAH acquisition by the Company; the effect of the BFAH acquisition on BFAH stakeholders; the location of MTY's United States head office and where MTY's United States operations will be managed; the retention of BFAH's 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 BFAH acquisition; the satisfactory fulfilment of all of the conditions precedent to the BFAH acquisition; the receipt of all required approvals and consents including regulatory, TSX, shareholder and any other approvals; acceptable financing to complete the BFAH acquisition; future results of BFAH's business and operations meeting or exceeding historical results; the success of the integration of BFAH's 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 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 May 25, 2016. 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

On Behalf of the Board of Directors of
MTY Food Group Inc.

Stanley Ma, Chairman, President & CEO


SOURCE MTY Food Group Inc.

Eric Lefebvre, Chief Financial Officer at 1-514-336-8885 x 288 or by email at, or visit our website: or SEDAR's website at under the Company's name.Copyright CNW Group 2016

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