MTY Food Group agrees to acquire BBQ Holdings for $200M

Multibrand franchisor to further diversify restaurant portfolio with addition of casual, fast-casual concepts

MTY Food Group agreed to acquire BBQ Holdings for approximately $200M, or $17.25 per share, including the assumption of the target’s net debt. Based in Montreal, MTY franchises numerous of restaurant brands, including Papa Murphy’s, Manchu Wok, and Baja Fresh. The transaction will be funded by cash on hand and MTY’s line of credit.

Purchase overview

BBQ Holdings operates a diversified collection of restaurants, including the Famous Dave’s, Village Inn, Barrio Queen, and Granite City brands. Fresh off of its acquisition of Barrio Holdings, the 300-unit company becomes a subsidiary of MTY, which has 3,900 locations in the United States alone.

For the fiscal year ended January 1, 2023, BBQ Holdings expected to generate a 12-month run-rate system sales of $685M to $725M. BBQ Holdings anticipated 12-month cash EBITDA of $25.5M to $27.5M. The transaction value represents 7.5 x the midpoint of the 12-month EBITDA projection.

Global MTY locations totaled 6,660. In July 2016, MTY entered the US market with the acquisition of Kahala Brands. Kahala franchises several concepts, including Baja Fresh, The Counter Burger Joint, Cold Stone Creamery, and Pinkberry. In 2019, MTY acquired the Papa Murphy’s take-n-bake chain for $190M.

“This transaction represents another key acquisition for MTY as we further scale and enhance our existing U.S. portfolio through the addition of nine unique brands, said Eric Lefebvre, chief executive of MTY. “The transaction combines highly complementary businesses, including BBQ Holdings’ exciting casual and fast casual brands. BBQ Holdings’ restaurants are well established within each of their respective markets with a strong network of franchise partners, well-run corporate owned locations, and a best-in-class management team. We are excited about the prospects of adding BBQ Holdings’ brands to the MTY family and we look forward to welcoming Jeff Crivello and his team and their franchise partners.”


Transaction rationale

The acquisition of BBQ Holdings will add 9 new restaurant brands to MTY’s portfolio, also increasing projected sales by 23%. The transaction will further ingrain MTY in the US foodservice market, increasing US system sales from 58% to 66% of MTY’s sales.

Through BBQ Holdings, MTY will further diversify its portfolio of restaurant brands. It will derive more of its sales from casual dining and fast-casual dining brands. Currently, these non-fast-food sales represent 29% of the business, but will rise to 43% after the closing of the transaction.

MTY also noted that BBQ Holdings will bring a complementary restaurant concept mix, lowering the seasonality of the business. Furthermore, BBQ Holdings has a talented management team, employee base and executive leadership group. The company’s top executives have established a strong history of successful M&A.

Jeff Crivello, chief executive of BBQ Holdings, commented “We are thrilled to partner with MTY and its talented team of restaurant operators. Over the past four years we have significantly grown revenue and our restaurant portfolio while building a world-class team of entrepreneurs. We look forward to continuing the execution of our three pillars of growth, which we believe align very closely with MTY’s vision. With more than 80 brands, MTY brings vast buying power and a team of industry leaders who will provide additional support to our franchise partners. As our founder Dave Anderson says, we strive to deliver famous experiences with our ‘yes is the answer, what’s the question’ hospitality.”



Both of the companies’ Board of Directors approved the transaction. In addition, certain key shareholders of BBQ Holdings have signed agreements to support the merger agreement. These shareholders in support hold 37% of the outstanding shares of BBQ Holdings. The completion of the transaction is subject to customary regulatory approvals, and should materialize, conditionally, in Q4 2022.

National Bank Financial Inc. acted as sole financial advisor to MTY and Morrison & Foerster LLP provided legal advisory for the transaction. Moreover, Kroll, LLC served as financial advisor to BBQ Holdings and Dentons Sirote PC and Lathrop GPM LLP served as its legal advisors.

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