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MTY to roll out a deal with Papa Murphy’s
Posted on Friday, 12 April 2019 06:51
MTY Food Group is eating up US-based pizza company Papa Murphy’s Holdings through a public takeover worth USD 190.00 million.

Under the terms of the transaction, the acquiror is offering USD 6.45 per share, representing a premium of 31.9 per cent to the target’s close of USD 4.89 on 10th April, the last trading day prior to the announcement.

The deal, which will be funded using MTY’s existing credit facility, is expected to complete in the second quarter of 2019, subject to the usual raft of closing conditions and regulatory approvals.

Papa Murphy’s first opened its ovens in 1995, and is billed as the operator of the largest take ‘n’ bake pizza brand in the US, which provides customers with freshly made pizzas to bake at home.

It has more than 1,400 stores across 37 states and the group posted USD 22.30 million in adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) in the financial year ended 31st December 2018.

Through the deal, MTY will expand its presence in the US pizza market, and expects the transaction to be immediately accretive to its EBITDA and cash flow.

Eric Lefebvre, chief executive of the buyer, said: “We believe the pizza segment is highly attractive due to its size, fragmented nature and growth potential.

“We expect the combination of these two companies and the expertise it brings to produce tremendous opportunities for MTY’s US expansion objectives.”

Headquartered in Montreal, the purchaser claims to be one of the largest franchisors for the restaurant industry in North America.

MTY’s portfolio features brands such as Big Smoke Burger, Sushi Go, Ben & Florentine and Jugo Juice, among others.

For the financial year ended 30th November 2018, the buyer generated total revenue of CAD 353.30 million (USD 265.09 million), up from CAD 276.08 million in the preceding 12 months.

MTY is no stranger to the acquisition trail, having agreed to snap up Canadian fast food chain operator South St Burger for an undisclosed sum last November.

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