In the news release, MTY Completes the Acquisition of
Kahala Brands, Ltd., issued
26-Jul-2016 by MTY Food Group Inc.
over CNW and PR Newswire, we are advised by the company that the
second paragraph's first sentence should read " The total
consideration for the transaction is approximately US$310 million, including US$240 million cash, and remains subject to
post-closing working capital adjustments." rather than " The total
consideration for the transaction is US$240
million and remains subject to post-closing working capital
adjustments. " as originally issued inadvertently. The complete,
corrected release follows:
MTY Completes the Acquisition of Kahala Brands, Ltd.
TSX Trading Symbol: "MTY"
MONTREAL, July 26, 2016 /PRNewswire/ - MTY Food Group Inc.
("MTY" or the "Company") (TSX: MTY) announced today that pursuant
to the announcement made on May 25,
2016, that it has acquired all of the shares of Kahala Brands, Ltd. ("Kahala")
(www.kahalabrands.com) pursuant to the merger of one of its
wholly-owned subsidiaries with and into Kahala.
The total consideration for the transaction is approximately
US$310 million, including
US$240 million cash, and remains
subject to post-closing working capital adjustments. Sources
of funds include the issuance of 2,253,930 shares of MTY Food Group
Inc. to the sellers, C$30 million of
MTY's cash on hand and the remainder coming from MTY's new
C$325 million credit facilities.
At closing, Kahala operates 18 brands in 27 countries, totalling
approximately 2,800 locations. The combined entity is
expected to produce over C$2 billion
annually in system sales generated by approximately 5,500
franchised and corporate locations.
"This is a turning point in MTY's history", said Mr.
Stanley Ma, CEO of MTY. "MTY
now has a solid, profitable and scalable platform from which to
grow its US and international operations. Moreover, a
sizeable, dynamic and talented group of employees is now joining
the MTY family. This transactions opens the door to endless
opportunities for MTY and its shareholders".
The operations of Kahala will stay in Kahala's current
headquarters, located in Scottsdale,
Arizona, while MTY's US operations will move into Kahala's
offices. Mr. Jeff Smit,
Kahala's Chief Operating Officer, will be leading the US operations
of the combined entity.
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 expected system
sales of the combined entity; potential growth of the Company's US
and international operations; the potential impact of the Kahala
acquisition on the Company and its shareholders; and the location
of MTY's US operations. 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 Kahala acquisition; future
results of Kahala's business and operations meeting or exceeding
historical results; the success of the integration of Kahala's
operations 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; and the
timing and availability of external financing on acceptable terms.
Expected system sales 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 MTY's 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
July 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 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.