Food-court king Stanley Ma is breaking into the U.S. market with his biggest takeover deal so far: the Extreme Pita, PurBlendz and Mucho Burrito brands.
Mr. Ma's company, Montreal-based MTY Food Group Inc., said on Tuesday that its subsidiary MTY Tiki Ming Enterprises Inc. has struck an agreement to buy the assets of the three fast-food banners for $45-million (U.S.).
The banners – grouped under the name Extreme Brandz – are expected to have more than 235 Extreme Pita and over 70 Mucho Burrito restaurants in operations in Canada and the U.S. by the date of closing, MTY Food said in a news release.
The PurBlendz concept – an add-on to the Extreme Pita units – is anticipated to be present at about 70 Extreme Pita restaurants at closing.
Closing is expected on or before Sept. 17, 2013.
Publicly listed MTY said it's buying most of the Extreme Brandz assets of a group of companies from the three co-founders, Alex Rechichi, Mark Rechichi and Sean Black.
Extreme Brandz posted system-wide sales of over $103-million in the most recent fiscal period, MTY said.
"We are very excited to have the opportunity to acquire two brands that enjoy such strong brand equity and that have a significant growth potential in Canada and outside of our borders," Mr. Ma, chief executive officer of MTY Food, said in a statement.
"This will complement MTY's current portfolio not only in terms of offering to its customers, but also in terms of geographical location; the 40 stores in the United States will be MTY's first stores on American territory. The ice is now broken."
Brian Pow, vice-president of research at Acumen Capital Partners in Calgary, said the deal looks like a good one.
"They've pretty well exhausted opportunities in Canada in terms of brands and food types. It probably makes sense, because they have significant market share in Canada, to move into the U.S."
The price "looks a little bit aggressive but they're buying a recognized going concern."
Extreme Brandz has Canadian offices in Toronto and Calgary, as well as office in Scottsdale, Arizona.
MTY's brands include Cultures, Thai Express, Yogen Früz and Country Style.
It has 26 banners in all and about 2,200 units.
Mr. Ma, who came to Canada with his family from Hong Kong in the 1960s, got his start in 1979 with a single restaurant offering Chinese and Polynesian food in the Montreal-area bedroom suburb of Laval.