A Canadian operator of 40 restaurant brands is expanding its U.S. presence by acquiring Scottsdale-based Kahala Brands, the parent company of Cold Stone Creamery and fast-food restaurants.
The buyer is the MTY Food Group, based in St. Laurent, Quebec, which is a franchisor and operator of more than 2,700 restaurants mainly in Canada.
The deal, announced Wednesday, is worth an estimated $300 million, including $240 million in cash and 2.25 million shares of MTY stock.
The combined entity, with its U.S headquarters in Scottsdale, will have a portfolio of about 5,500 stores under 57 brands.
In a statement, MTY said the acquisition of Kahala represents a major milestone for the company, creating a growth platform for MTY brands operating in the United States.
“MTY had been searching for the right foundation for its U.S. expansion for the last three years, and it has finally found the perfect match,” said Stanley Ma, MTY chairman and CEO. “The combination of the two companies’ portfolio and expertise will produce tremendous opportunities in Canada, in the United States and worldwide.”
Michael Serruya, Kahala chairman and CEO, said the merger of Kahala and MTY is in the best interests of all Kahala’s shareholders, employees, franchisees and suppliers.
“My brothers and I have known Stanley Ma for many years,” Serruya said. “He is an extremely competent and professional CEO, who successfully leads an outstanding company. “
In addition to Cold Stone Creamery, Kahala Brands include Blimpie, Taco Time, Samurai Sam’s and Pinkberry.
MTY reported more than $1 billion in sales from its portfolio of 40 restaurant brands.
The closing of the transaction is expected to happen within the next 75 days.