MONTREAL, Oct. 18, 2021 /CNW Telbec/ - MTY Food Group Inc. ("MTY" or the "Company") (TSX: MTY) announced today that one of its wholly-owned subsidiaries has signed an agreement to acquire the assets of Küto Comptoir à Tartares (www.kuto.ca), a rapidly growing tartare restaurant chain.
The Küto network currently has 31 restaurants in operation, all franchised and all in the province of Quebec. Thirteen of these locations have opened in the past 12 months. On an annualized basis, the network's system sales is between $20 million and $25 million.
Eric Lefebvre, CEO of MTY, said: "Küto is a young innovative brand that stands out for the quality of its products. It relies on a network of committed franchise partners who are just as dynamic. Küto benefits from a loyal customer base who are passionate about high-end tartares and novelty menu items. It offers significant growth potential for the years to come."
The transaction is expected to be finalized within the next 30 days but remains subject to several conditions customary for a transaction of this nature. There can be no assurance that the transaction will be completed as described above, or that the expected closing date will materialize.
Jean-Michel Paquet, current owner of Küto, will remain at the helm of the brand, which will also keep its head office and central kitchen in Delson, Quebec. "I am very proud to have built a strong, successful network, filled with potential and opportunities for growth. A network made up of proud, passionate and enthusiastic colleagues and franchise partners where human values are respected and where the pleasure of eating is the priority ", testifies Mr. Paquet. "100% of our team remains in place, which will keep the focus on Küto's quality mission and on the values of this company; Quality, respect, customer orientation, innovation, consistency and pleasure".
Financing
Total consideration for the transaction will be financed using MTY's cash on hand and existing credit facilities.
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 completion of the acquisition, the potential closing date of the acquisition and the potential impact of the acquisition on the Company's future operations; opportunities, growth and expansion; the suitability of the acquisition by the Company; the effect of the acquisition on Küto stakeholders; the potential retention of Küto management team; the expected EBITDA, revenue, system sales and potential growth of the combined entity.
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.
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 the 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 October 18, 2021. 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.
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Eric Lefebvre, Chief Executive Officer
SOURCE MTY Food Group Inc.
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