MONTREAL -- MTY Food Group Inc. announced recently 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"), for an estimated consideration of USD $35 million.
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"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.
SOURCE MTY Food Group Inc.
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