MTY Group, a Montreal-based operator of quick service restaurants, announced today that it had signed an agreement to acquire the shares of one of the largest fast food franchisors in the U.S. Kahala is the Arizona-based company behind such brands as the cult frozen yogurt chain Pinkberry, Cold Stone Creamery, Blimpie, Taco Time, and Samarai Sam's Teriyaki Grill. The blockbuster deal, valued at close to $300 million USD, is expected to close within 75 days. In a statement, food court mogul Stanley Ma, Chair of the Board and Chief Executive Officer of MTY, declared: "This is one of the most important days in the history of MTY, being able to acquire a great portfolio of brands managed by among the very best people in the industry. MTY had been searching for the right foundation for its US expansion for the last three years, and it has finally found the perfect match. The combination of the two companies' portfolio and expertise will produce tremendous opportunities in Canada, in the United States and worldwide."
"My brothers and I have known Stanley Ma for many years," remarked Michael Serruya, Ma's counterpart at Kahala. "He is an extremely competent, and professional CEO, who successfully leads an outstanding company. The merger of Kahala and MTY in my opinion is in the best interests of all Kahala's shareholders, our outstanding employees, franchisees, suppliers, and the entire Kahala community."
Formed in 1979 by Stanley Ma, MTY's 26 brand names, prior to the Kahala merger, include Thaï Express, Country Style, Groupe Valentine, Vanelli's, Extreme Pita, Cultures, La Crémière, Sushi Shop, Veggirama, Caferama, O'burger, Tiki Ming, Vie & Nam, Au Vieux Duluth Express, FranxSupreme, ChicknChick, Croissant Plus, Koya Japan, Kim Chi, Panini, Tandori, Tutti Frutti, Villa Madina Mediterranean Cuisine, Sukiyaki, and the Canada-based outlets of Yogen Früz, Taco Time, and TCBY. The Kahala takeover will add a dozen brands and 2,800 stores to MTY's stable, and give the company a considerable foothold in the U.S. MTY's U.S. headquarters will now move to Kahala's offices in Scottsdale, Arizona. Both MTY and Kahala generated approximately $1 billion CAD in system sales in 2015. The combined entity will have a portfolio of approximately 5,500 stores under 57 brands.
When Burger King and Canada's iconic Tim Hortons became one in 2014, some protectionists north of the border lost their minds. (Some Americans, in turn, were up in arms over Burger King's apparent tax dodge.) It's doubtful the buyout of Pinkberry by a Montreal-based company will inflame such passions in America, but it will be interesting to see what Stanley Ma does next. From a lone Tiki Ming outlet in Montreal's Rockland Mall to a string of corporate takeovers decades later, the Hong Kong born businessman has grown his company into one of the continent's most formidable restaurant franchisors.