Cara completes acquisition of St-Hubert

Cara has acquired St-Hubert for a purchase price of $537 million on a cash-free, debt-free basis. Image: St-Hubert Twitter

VAUGHAN, ON - On March 31, 2016, Cara Operations Limited announced that it entered into a definitive agreement to acquire 100% of Group St-Hubert, Quebec's leading full-service restaurant operator as well as a fully-integrated food manufacturer for $537 million. Cara announces today that it has successfully completed the St-Hubert acquisition.  

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Jean-Pierre Léger, the outgoing Chairman and CEO of St-Hubert commented, "I'm proud of the St-Hubert legacy and confident that this new alliance with Cara will open up opportunities for St-Hubert associates as well as new possibilities, both inside and outside of Quebec, for the St-Hubert business". 

Cara's Chief Executive Officer, Bill Gregson, commented, "This acquisition represents a historic alliance and an excellent strategic fit for both companies. It gives St-Hubert the opportunity to expand its restaurant network as well as to drive a national retail food program on behalf of Cara, leveraging St-Hubert's existing management, Quebec manufacturing facilities and supplier network". 

Cara has acquired St-Hubert for a purchase price of $537 million on a cash-free, debt-free basis.  The purchase price is subject to customary working capital adjustments. St-Hubert generates approximately $620 million in System Sales, including sales from its food operations division, and approximately $44.8 million in Operating EBITDA. The St-Hubert transaction is immediately accretive to Cara's Adjusted Net Earnings per Share, before synergies are considered.

Cara and St-Hubert will leverage their combined businesses to achieve an estimated $10 million of annual run-rate synergies within 3 years.  Cara has financed the St-Hubert acquisition through the issuance of $50 million in Cara subordinate voting shares ("Shares") to the vendor, approximately $230 million in proceeds from Cara's previously announced offering of subscription receipts (the "Subscription Receipts"), on a private placement basis, and through upsizing its credit facility with Scotiabank and a syndicate of lenders. 

At closing, Cara's Pro Forma Net Debt to Operating EBITDA ratio is expected to be approximately 1.9x, providing Cara with room on the balance sheet to fund further growth, including acquisitions.

In accordance with the terms of the agreement pursuant to which the Subscription Receipts were issued, each outstanding Subscription Receipt will be exchanged today for one Share, resulting in the issuance of 7,863,280 Shares and a cash payment equal to $0.20 per Subscription Receipt.

The cash payment is equal to the aggregate amount of dividends per Share for which record dates occurred since the issuance of the Subscription Receipts, less withholding taxes, if any. The Shares issued in exchange for the Subscription Receipts will be listed for trading on the Toronto Stock Exchange.

Source Cara Operations Limited