MONTREAL, Dec. 20, 2016
/CNW/ - Imvescor Restaurant Group Inc. ("IRG" or
the "Company") (TSX: IRG) is pleased to announce
that it has entered into a binding agreement to acquire
Ben & Florentine, a leading franchisor in the
breakfast and lunch category with over 40 locations across
Quebec, Ontario and Manitoba. It will be an asset transaction with
total consideration of approximately $17.7 million payable at closing with an
additional earn-out payment of up to $7.3
million payable in the first quarter of 2018 based upon the
achievement of certain financial results driven principally by the
successful opening of new restaurants.
Frank Hennessey, President and
Chief Executive Officer of IRG said, "We are excited by the
Ben & Florentine acquisition which complements IRG's
existing brands and consolidates IRG's solid position in
Quebec. This acquisition of a
homegrown Quebec business is
consistent with our strategic acquisition strategy to act upon
attractive opportunities, complements our strategic plan initiated
in 2015 and is an example of acquisitions we intend to continue to
pursue. We expect this transaction to be immediately accretive to
earnings, while creating a new growth oriented brand. Ben &
Florentine has been great at converting system sales into EBITDA at
an even better margin than IRG has achieved in the past. The
purchase price represents a significant discount to our trading
multiple."
Lorne Cassoff, the founder and
President of Ben & Florentine will continue to lead the brand
and will join IRG's executive team. "I'm proud of the great
organization that we have built since 2009 with our franchisee
partners by delivering authenticity and transparency to our
customers every single day. We intend to pursue our growth strategy
for the brand, and we look forward to joining the Imvescor family
with the many new opportunities that this acquisition will provide
for all stakeholders".
Transaction Overview and Rationale
The acquisition of Ben & Florentine adds a leading brand to
IRG's portfolio. Management believes that the acquisition presents
several compelling strategic benefits:
- A growth oriented brand. Since opening its first restaurant in
2009, Ben & Florentine has demonstrated rapid growth to 12
locations by 2010, opening its first location in Ontario in 2012, and now boasts over 40
locations across Quebec,
Ontario and Manitoba with $35
million in system sales and significant growth
potential;
- Ability to generate economies of scale while leveraging IRG's
shared services and operating track record;
- Increases IRG's critical mass in Quebec, cementing the Company's strong
position;
- Single digit accretion to earnings per share while keeping debt
leverage at approximately 1x EBITDA;
The Company intends to finance the acquisition through a
combination of cash on hand and its existing credit facility.
The acquisition, which is expected to close in the first quarter
of 2017, is subject to certain customary closing conditions and
purchase price adjustments.
Conference Call Details
Frank Hennessey, President and
Chief Executive Officer, and Tania M.
Clarke, Chief Financial Officer will host a conference call
to discuss Q4 2016 results at 8:30 am
E.T. on Tuesday, December 20,
2016. To access the conference call by telephone, dial
1-888-231-8191 (Toll-Free), 514-807-9895 (Montreal) or 647-427-7450 (Toronto). Please connect approximately
10 minutes prior to the beginning of the call to ensure
participation.
A live audio webcast of the conference call will be available at
www.imvescor.ca/investor-relations/. Please connect at least 15
minutes prior to the conference call to ensure adequate time for
any software download that may be required to join the webcast. A
recording of the conference call will be archived for replay by
telephone until Tuesday, December 27,
2016 at midnight. To access the archived conference call,
dial 1-855-859-2056 (Toll-Free), 514-807-9274 (Montreal) or 416-849-0833 (Toronto) and enter the reservation number
26204905.
About Imvescor Restaurant Group Inc. Imvescor Restaurant
Group Inc. is a dynamic and innovative organization in the family
and casual dining restaurant industry. The Company is a franchise
and licensing business that operates restaurants in Eastern Canada under four banners: Pizza
Delight®, operating primarily in Atlantic Canada, in the family/mid-scale
segment, Toujours Mikes and Scores®, operating primarily
in Québec in the family and casual dining segments and the take-out
and delivery segments, and Bâton Rouge®, operating in
Québec, Ontario and Nova Scotia in the casual dining segment. The
Company also licenses to third parties the right to manufacture and
sell prepared food products under the Pizza Delight®,
Toujours Mikes, Scores® and Bâton Rouge®
brands and, through its wholly-owned subsidiary, Groupe Commensal
Inc., manufactures and sells vegetarian branded food products in
grocery stores and retail outlets under the Commensal®
brand.
Non-IFRS Measures and Financial Metrics: The information
contained in this press release includes some figures that are not
performance measures consistent with International Financial
Reporting Standards ("IFRS"). Because they do not have a
standardized meaning prescribed by IFRS, they may not be comparable
with similar measures presented by other issuers.
"EBITDA" is defined as earnings or loss before interest income,
interest expense, depreciation and amortization and income tax
expense.
The Company uses EBITDA because the measure enable management to
assess the Company's operational performance and is a financial
indicator of the Company's ability to service and incur debt. This
measure should not be considered by an investor as an alternative
to earnings, an indicator of operating performance or cash flows,
or as a measure of liquidity. Refer to the Reconciliations of
Non-IFRS Measures section of this MD&A for more details.
"System Sales" is the aggregate sales achieved by all "Pizza
Delight", "Toujours Mikes", "Scores" and "Bâton Rouge" restaurants,
whether they are company-owned restaurants or franchises. This
performance measure indicates the Company's overall growth and
reflects the direct impact of the restaurant openings and
closures.
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of applicable securities laws, including but not
limited to, IRG's business objectives, estimates, outlook,
strategies and priorities and all other statements other than
statements of historical facts. Forward-looking statements may
include estimates, intentions, plans, expectations, opinions,
forecasts, projections, guidance or other statements that are not
statements of fact. Forward-looking statements are often, but not
always, identified by the use of words such as "may", "should",
"would", "will", "expect", "plan", "anticipate", "believe",
"estimate", "predict", "potential, "targeting", "intend", "could",
"might", "continue", "outlook" or the negative of these terms or
other comparable terminology. All such forward-looking statements
are made pursuant to the "safe harbour" provisions of applicable
securities laws.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors outside of IRG's control. A number
of factors could cause the actual results of IRG to differ
materially from the results discussed in the forward-looking
statements, including, but not limited to: risks associated with
quality control, food borne illnesses and health concerns, adverse
changes to economic conditions, the Company's ability to retain
certain key personnel, the Company's ability to respond to various
competitive factors affecting its operations, franchise development
and growth of the retail licensing opportunities, changes in
consumer preferences, the Company's retail products dependence on
the strength of the Company's restaurant brands, the protection of
the Company's intellectual property, the success of the restaurant
rejuvenation plan, the Company's dependence on royalty stream, the
Company's reliance on suppliers and availability and quality of raw
materials, changes in the Company's relationships with its
franchisees, the Company's ability to open new restaurants, the
closure of restaurants, the impact of an increase in Company-owned
restaurants, the Company's ability to renew leases and limit lease
exposure, the risks associated with negative publicity and its
impact on the Company's reputation, compliance with regulations
governing confidentiality of guest information, potential
litigation and other complaints, compliance with government
regulations, the Company's dependence on third parties, changes in
laws concerning employees, changes in the Company's relationships
with its employees, the Company's ability to ensure workplace
safety, risks associated with franchise regulations, compliance
with regulations governing alcoholic beverages, environmental risks
and regulations, public safety issues, the Company's dependence on
technology, risks of underreporting of sales by franchisees,
inherent risks associated with internal control over financing
reporting, the indebtedness of the Company and the restrictive
covenants to which it is subject, the impact of sales tax upon
System Sales, the risk associated with the Company's dividend
policy, the impact of seasonality and other factors on quarterly
operating results, the risk of uninsured losses, changes in
commodity prices and other factors referenced in the Company's
Annual Information Form and the Company's other continuous
disclosure filings which are available on SEDAR at www.sedar.com.
These factors are not intended to represent a complete list of the
factors that could affect IRG but should, however, be considered
carefully.
Further, although the forward-looking statements contained
herein are based on information currently available to IRG's
management and on the current assumptions, intentions, plans,
expectations, estimates, opinions, forecasts, projections and other
assumptions made by IRG's management in light of its experience and
perception of historical trends, current conditions and expected
future developments (such as IRG's future growth, results of
operations, performance and opportunities as well as the future of
the economic environment in which it operates), as well as other
factors that IRG's management believes are appropriate and
reasonable in the circumstances and on the date of this press
release, there can be no assurance that such assumptions,
intentions, plans, expectations, estimates, opinions, forecasts,
projections and other assumptions will prove to be correct or that
actual results will not differ materially from those anticipated in
such forward-looking statements.
In particular, the forward-looking statements in this press
release include statements relating to IRG's expectations with
respect to the completion of the Ben & Florentine acquisition
and the timing thereof, IRG's ability to achieve the expected
benefit of the Ben & Florentine acquisition, the anticipated
impact of the Ben & Florentine acquisition on IRG business and
IRG outlook for the financial and operating performance of the Ben
& Florentine division.
Forward-looking statements are provided herein for the purpose
of giving information about IRG's current strategic priorities,
expectations and plans, thereby allowing investors and others to
get a better understanding of IRGI's business outlook and operating
environment. Readers are cautioned, however, that such information
may not be appropriate for other purposes and should not place
undue reliance on the forward-looking statements contained in this
press release. IRG assumes no obligation to update or revise such
forward-looking statements to reflect new information, future
events or otherwise, except as required by applicable securities
laws. Except as otherwise indicated, forward-looking statements do
not reflect the potential impact of any non-recurring or other
special items or of any transactions that may be announced or that
may occur after the date of this press release. The financial
impact of these transactions and non-recurring and other special
items can be complex and depends on the facts particular to each of
them. IRG therefore cannot describe the expected impact in a
meaningful way or in the same way it presents known risks affecting
the business. IRG's forward-looking statements are expressly
qualified in their entirety by this cautionary statement.
Our brands:
Pizza
Delight®: www.pizzadelight.com
|
Scores®:
www.scores.ca
|
|
|
Toujours
Mikes: www.mikes.ca
|
Bâton Rouge®:
www.batonrouge.ca
|
SOURCE Imvescor Restaurant Group Inc.