Business
Second Cup Royalty Income Fund announces acquisition of the The Second Cup Ltd. and the rescheduling of the Annual Meeting
MISSISSAUGA, ON, May 1 /CNW/ - Second Cup Royalty Income Fund (the "Fund") (TSX: SCU.UN) announce...
About this update from Aegis Brands Inc
[{"type":"text","content":"\n\n\n\nMISSISSAUGA, ON, May 1 /CNW/ - Second Cup Royalty Income Fund (the\n"Fund") (TSX: SCU.UN) announced today that its wholly-owned subsidiary has\nentered into an agreement to acquire all of the outstanding shares of The\nSecond Cup Ltd. ("Second Cup") for nominal consideration effective June 27,\n2009. Following closing of the acquisition, Second Cup and its management team\nwill continue to operate the Second Cup business as a wholly-owned subsidiary\nof the Fund, recombining the business of the Fund with the business of Second\nCup. Second Cup is the operating company that carries on the business of\nfranchising Second Cup cafes and operating company-owned cafes in Canada.\nSecond Cup currently makes royalty payments to a subsidiary of the Fund\npursuant to a license and royalty agreement. As a result of the recombination,\nunitholders will own both the royalty and operating branches of the business.\nThe Fund also announced that the annual general meeting has been rescheduled\nand will take place on June 8, 2009.\n\n\nThe acquisition is the result of a review of the structure of the Fund\nand the Second Cup business, undertaken by the Fund and The Second Cup Coffee\nCompany Inc., the current owner of Second Cup. In connection with its review,\nthe Fund received financial advice from TD Securities Inc., the Fund's\nexclusive financial advisor. Based on its review and such financial advice,\nthe Board of Trustees of the Fund determined that it was in the best interests\nof unitholders to recombine the business of Second Cup with the Fund for a\nnumber of reasons, including:\n\n\n- the recombination simplifies the relationship between the Fund and\n Second Cup and provides unitholders with direct oversight over the\n operation of the Second Cup business through the Fund's Board of\n Trustees;\n\n- the recombination will enable unitholders to enjoy the full upside in\n the business attributable to operational improvements, new cafe\n openings, exciting new business opportunities and the eventual\n strengthening of the Canadian economy;\n\n- the recombination will not impact the Fund's intention to pay\n distributions at an annual rate of $0.92 as announced on April 20,\n 2009;\n\n- the recombination will mean that unitholders will in the future\n receive the full benefit of net new cafe openings as there...