KANSAS CITY, MO. — Montreal-based MTY Food Group Inc. is expanding its portfolio of restaurant brands through a merger with BBQ Holdings Inc., the parent company of foodservice chains that include Famous Dave’s and Granite City. MTY has agreed to acquire all issued and outstanding common shares of BBQ Holdings for $17.25 per share.
The transaction, valued at approximately $200 million, is expected to be completed in the fourth quarter and is subject to customary closing conditions and regulatory approval. It will see BBQ Holdings become a subsidiary of MTY and be de-listed from NASDAQ.
“BBQ Holdings’ restaurants are well established within each of their respective markets with a strong network of franchise partners, well-run corporate owned locations, and a best-in-class management team,” said Eric Lefebvre, chief executive officer of MTY. “We are excited about the prospects of adding BBQ Holdings’ brands to the MTY family and we look forward to welcoming Jeff Crivello and his team, and their franchise partners.”
Minnetonka, Minn.-based BBQ Holdings operates a variety of barbecue restaurants, including Real Urban BBQ and Clark Crew BBQ, in addition to Famous Dave’s. It has expanded its network in recent years with the additions of Village Inn, Bakers Square, Tahoe Joe’s and Barrio Queen.
“We look forward to continuing the execution of our three pillars of growth, which we believe align very closely with MTY’s vision,” said Jeff Crivello, CEO of BBQ Holdings. “With more than 80 brands, MTY brings vast buying power and a team of industry leaders who will provide additional support to our franchise partners.”
The company, which operates more than 200 franchised and 100 corporate-owned restaurants, expects to generate 12-month run-rate system sales between $685 million and $725 million for the fiscal year ending in January.
The merger will add nine brands to MTY’s portfolio of 80 restaurant brands. The company in 2019 purchased Papa Murphy’s for $190 million after establishing its presence in the United States with the acquisition of Kahala Brands, parent company of Cold Stone Creamery, Taco Time, Baja Fresh, Pinkberry and more, in 2016.
MTY said the deal will increase its systemwide sales by 23% while expanding its US system sales from 58% to 66% of total sales.
In separate acquisition news, Butterfly Equity, a Los Angeles-based private equity firm, has agreed to acquire the fast-casual chain Qdoba Mexican Eats from Apollo Global Management for an undisclosed sum.
The transaction, which is expected to close later this year, will merge Butterfly’s Modern Restaurant Concepts (MRC) platform with Qdoba into one fast casual restaurant platform. MRC consists of Modern Market Eatery, which offers protein-centric dishes across Colorado, Texas, Arizona and Indiana, and Lemonade, which offers healthy lunch and dinner options throughout California. The three restaurants will continue to operate as separate brands.
Known for its burritos, tacos, quesadillas, and nachos, San Diego-based Qdoba is the No. 1 Mexican fast casual franchisor in North America, according to Butterfly. It operates nearly 750 units across North America, approximately 450 of which are franchised. Upon completion of the transaction, MRC will comprise of approximately 800 units touching nearly every state and employing more than 18,000 systemwide. Keith Guilbault, chief executive officer of Qdoba, will continue to lead the brand as co-CEO of MRC.
Alternative asset manager King Street Capital Management also invested in MRC as part of the transaction.
“We could not be more excited to bring together three incredible restaurant brands in Qdoba, Modern Market and Lemonade to form one of the leading next-generation restaurant platforms,” said Adam Waglay, co-founder and co-CEO of Butterfly. “Together, these brands are incredibly positioned for the future with craveable food, flexible and affordable menu choices and a powerful off-premises offering.”