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Kahala Brands-MTY merger gets shareholder approval

FBR Staff Writer Published 22 July 2016

Scottsdale-based Kahala Brands has received its shareholders’ approval for its proposed merger with a wholly-owned subsidiary of MTY Food Group.

Kahala Brands is a global franchising company with a portfolio of 18 quick-service restaurant brands with nearly 2,900 locations in 27 countries.

Headquartered in St.-Laurent, Quebec, MTY is the franchisor and operator of nearly 2,700 restaurants, operating primarily in Canada and in 14 other countries.

MTY is one of the major quick service restaurants industry in Canada, having a systemwide sales of over CAD1bn ($7,600m) and a portfolio of 40 brands.

The merger deal was signed in May and the transaction was expected to close within the next 75 days.

After the completion of the merger, Kahala Brands will continue to be operated from its current Scottsdale, AZ headquarters.

North Point Advisors acted as a financial advisor to the Serruya Family (the controlling stockholders of Kahala Brands) in the transaction.

Kahala said: “Based on the closing market price of MTY common shares on the Toronto Stock Exchange on 24 May 2016, the exchange rate of Canadian dollars to US dollars on 24 May 2016, and subject to closing adjustments,

“a cash only stockholder or a combination stockholder of Kahala Brands who owns 100 shares of Kahala Brands stock would receive consideration valued at approximately $14,900 subject to increase or decrease based on the average market price of the MTY common shares for the 10 trading days prior to the closing of the transaction, and the then-current US/Canadian dollar exchange rate, and closing adjustments.”