SCOTTSDALE, Ariz., May 25, 2016 /PRNewswire/ -- Scottsdale-based Kahala Brands, Ltd.™ (OTC: KAHL) (www.kahalabrands.com) ("Kahala Brands"), today announced that it has signed an agreement to merge with an indirect, wholly-owned subsidiary of MTY Food Group Inc. ("MTY"). MTY is a franchisor and operator of 40 concept restaurant brands, headquartered in Montreal, Quebec, Canada, and is traded on the Toronto Stock Exchange under the symbol "MTY".
The aggregate consideration for Kahala Brands consists of 2,253,930 common shares of MTY (closing market price of MTY common shares on the Toronto Stock Exchange on May 24, 2016 of $35.68 Canadian) and $240,000,000 U.S. cash less actual closing costs, indebtedness and other customary adjustments ("Closing Adjustments").
The consideration to be paid to the individual stockholders of Kahala Brands can consist of all cash (a "cash only stockholder"), or if a stockholder is an accredited investor (as defined by applicable U.S. securities laws), a combination of cash and MTY common shares (a "combination stockholder"). Based on the closing market price of MTY common shares on the Toronto Stock Exchange on May 24, 2016, the exchange rate of Canadian dollars to U.S. dollars on May 24, 2016, and subject to Closing Adjustments, a cash only stockholder or a combination stockholder of Kahala Brands who owns 100 shares of Kahala Brands stock would receive consideration valued at approximately $14,900 U.S. subject to increase or decrease based on the average market price of the MTY common shares for the 10 trading days prior to the closing of the transaction, and the then-current U.S./Canadian dollar exchange rate, and Closing Adjustments. The closing of the transaction is expected to happen within the next 75 days and is subject to numerous closing and regulatory conditions which are fully set forth in the Confidential Proxy Statement that will be furnished to all Kahala Brands stockholders within approximately the next ten business days.
Kahala Brands stockholders should check their shareholdings since the capitalization of Kahala Brands was decreased in 2005 in a 1-for-100 reverse stock split. A current quote for shares of Kahala Brands can be found at www.otcmarkets.com under the symbol "KAHL".
Immediately following the closing of the merger, Kahala Brands will continue to be operated from its current Scottsdale, AZ headquarters.
North Point Advisors served as a financial advisor to the Serruya Family (the controlling stockholders of Kahala Brands) in connection with this Transaction. If you are a Kahala Brands stockholder and have questions about this transaction, please contact Michael Reagan at (480) 362-4800 or by e-mail at firstname.lastname@example.org.
About Kahala Brands
Kahala Brands is an international franchising Company with a portfolio of 18 quick-service restaurant brands with approximately 2,900 locations in 25 countries including: Cold Stone Creamery®, Blimpie®, TacoTime™, Samurai Sam's Teriyaki Grill®, The Great Steak & Potato Company™, NrGize Lifestyle Cafe™, Surf City Squeeze®, Johnnie's New York Pizzeria™, Cereality®, Kahala Coffee Traders® Frullati Café & Bakery™, Rollerz™, Ranch One®, America's Taco Shop®, Planet Smoothie®, Tasti D-Lite™, Maui Wowi®, and Pinkberry®.
MTY is the franchisor and operator of over 2,700 restaurants, operating mainly in Canada and in 14 other countries around the world. MTY is among the leaders in the Canadian quick service restaurant industry, with system wide sales of over C$1 billion and 40 brands under its portfolio. MTY is headquartered in St.-Laurent, Quebec, Canada and is traded on the Toronto Stock Exchange under the symbol "MTY."
For more information about MTY, please visit MTY's website at www.mtygroup.com or contact Eric Lefebvre, Chief Financial Officer at (514) 336-8885 x288 or by e-mail at email@example.com, or visit SEDAR's website at www.sedar.com under MTY's name.
Forward Looking Statements
Certain statements in this News Release may constitute "forward looking" statements that involve known and unknown risks, uncertainties, future expectations and other factors which may cause the actual results, performance or achievements of Kahala Brands and/or MTY or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. In some cases, forward-looking statements can be identified by such terms as "anticipate", "estimate", "may", "will", "expect", "predict", "believe", "plan" and other terminology. Such statements reflect our current intent, belief and expectations about future events and operating performance, speak only as of the date of this News Release and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Except as required by law, we assume no obligation to update or revise forward-looking statements, whether as a result of new information, future events or otherwise. Additional information about MTY is available in MTY's Management's Discussion & Analysis, which can be found on SEDAR at www.sedar.com.
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SOURCE Kahala Brands, Ltd.