Stanley Ma, the head of MTY Food Group Inc. at his office in Montreal in this file photo.John Morstad/The Globe and Mail
Food court mogul Stanley Ma's MTY Food Group Inc. has struck a friendly deal valued at more than $300-million (U.S.) to acquire Arizona-based Kahala Brands Ltd. and its 2,900 locations in 25 countries.
The agreement is by far Montreal-based MTY's biggest acquisition yet and represents a major expansion into the U.S. market.
The Kahala family of brands – which includes TacoTime, Cold Stone Creamery and Blimpie submarines – will be added to MTY's 2,700 restaurants in Canada and 14 other countries. Among MTY's 40 banners are Cultures, Thai Express and Vanellis.
Kahala's controlling shareholder is the Serruya family of Markham, Ont., which bought a controlling interest in the company three years ago in an auction.
Brothers Michael and Aaron Serruya started the Yogen Fruz frozen yogurt chain in 1986 and later developed the CoolBrands ice cream empire.
The agreement between MTY and Kahala announced Wednesday consists of $240-million in cash and about 2.25 million MTY shares, which closed on the Toronto Stock Exchange on Tuesday at $35.68 (Canadian).
MTY posted more than $1-billion in sales last year while Kahala sales are in the $950-million (U.S.) range.
Kahala will continue to operate out of its current Scottsdale, Ariz., head office.
Mr. Ma has built MTY into a major food court player through a series of acquisitions over the past several years that have paid off with an impressive stock-price performance.