MTY Food Group Inc (TSX: MTY), a Canadian casual, fast casual and quick service restaurant company, has agreed to acquire most of the assets of the sweetFrog Premium Frozen Yogurt franchise system based in Richmond, Virginia.
MTY agreed to pay about $46 million (US$35 million) for the system. The seller is Boxwood Capital Partners, the private equity arm of U.S. investment banking firm Boxwood Partners.
Boxwood acquired sweetFrog’s operating company in 2015. It previously held a minority stake.
Founded in 2009, sweetFrog has 254 franchised locations and 78 corporate-owned locations, most of them in the United States.
Following the deal’s close, expected within 30 days, Montréal-based MTY said it expects to consolidate operations and run the franchising platform from its U.S. headquarters in Scottsdale, Arizona.
MTY enters into an agreement to acquire sweetFrog Premium Frozen Yogurt
MONTREAL, Sept. 4, 2018 /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 most of the assets of the sweetFrog Premium Frozen Yogurt franchise system (“sweetFrog”) (www.sweetFrog.com), for an estimated consideration of USD $35 million.
“sweetFrog is an exciting brand serving premium quality frozen yogurt and will fit perfectly within our portfolio of brands.” said Jeff Smit, COO of MTY’s U.S. operations. “We are extremely happy about everything this brand has to offer and the growth potential ahead.”
“With an executive of Jeff Smit’s caliber leading U.S. operations, MTY is the perfect organization to lead sweetFrog during its next chapter of success. I am excited to see what Smit and his team of restaurant industry experts can do as we become the largest sweetFrog multi-unit franchisee.” said Patrick Galleher, Chairman & CEO of sweetFrog Enterprises, LLC and Managing Partner of Boxwood Capital.
sweetFrog currently has 254 franchised locations and 78 corporate-owned locations. Of those 332 restaurants, 324 are located in the United States and 8 are located internationally. As part of the deal, the current 78 corporate-owned locations will transition to franchised locations under current ownership. In the last 12 months, the sweetFrog network has generated over USD $92 million in system sales.
The transaction is expected to close within 30 days of this news release but remains subject to multiple conditions customary for a transaction of this nature. There is no assurance the transaction will be completed as described above, or at all, or that the anticipated closing date will materialize.
The acquisition of sweetFrog will solidify MTY as a dominant force in the frozen treat category and represents another major milestone for MTY as it continues to expand its presence in the United States.
Following the closing of the transaction, MTY expects to consolidate operations and run the franchising platform from its U.S. headquarters in Scottsdale, Arizona under the leadership of Jeff Smit.
Total consideration for the transaction will be financed using MTY’s cash on hand and existing credit facilities.
About MTY Food Group Inc.
MTY Food Group Inc. is a Canadian public company (TSE:MTY) headquartered in Montreal, Quebec. MTY has grown to become a North American market leader in the casual, fast casual and quick service restaurant dining industry and now franchises over 70 different concepts with approximately 5,400 locations. Excellence, devotion and innovation are the key values that drive the success of MTY Group (www.mtygroup.com).
About sweetFrog Frozen Yogurt:
Founded in 2009, sweetFrog (http://www.sweetfrog.com) is one of the fastest growing self-serve frozen yogurt brands in the United States. With a wide selection of premium frozen yogurt flavors and fresh toppings choices, sweetFrog was named Best Frozen Yogurt in the USA by The Daily Meal in 2014 and 2016. sweetFrog prides itself on providing a family-friendly environment where customers can enjoy soft-serve frozen yogurt, ice cream, gelato and sorbets with the toppings of their choice.
For more information about MTY Food Group, Inc., please visit https://mtygroup.com.
For more information about sweetFrog Frozen Yogurt, please visit http://www.sweetfrog.com.
On Behalf of the Board of Directors of
MTY Food Group Inc.
Stanley Ma, Chairman, President & CEO
Visit our website: www.mtygroup.com or SEDAR’s website at www.sedar.com under the Company’s name.
For further information: Eric Lefebvre, Chief Financial Officer at 1-514-336-8885 x 288 or by email at email@example.com