Business
Pizza Pizza Limited and Pizza Pizza Royalty Income Fund complete Pizza 73 acquisition
Pizza Pizza Limited and Pizza Pizza Royalty Income Fund complete Pizza 73 acquisition.
About this update from Pizza Pizza Royalty Corp.
[{"type":"text","content":"\n\n\n\nTORONTO, July 24 /CNW/ - Pizza Pizza Royalty Income Fund (the "Fund")\n(TSX: PZA.UN) and Pizza Pizza Limited ("Pizza Pizza") announced today that\nPizza Pizza has completed the previously-announced acquisition of Flying Pizza\n73 Inc. and its affiliated companies (together, "Pizza 73"). In connection\nwith this transaction, the Fund has acquired the trademarks and other\nintellectual property associated with Pizza 73 restaurant operations.\n\n\nThe acquisition of Pizza 73, a leading quick service restaurant ("QSR")\npizza retailer, based in Edmonton, Alberta, allows Pizza Pizza, which is\nmarking its 40th year in the industry, to expand into Western Canada and\nspecifically the fast-growing Alberta market. Pizza Pizza, Ontario's "number\none pizza", operates 532 restaurant locations, predominantly in Ontario and\nQuebec.\n\n\nThe Fund and Pizza Pizza acquired Pizza 73 for a combined purchase price\nof $70.25 million. The Fund, through Pizza Pizza Royalty Limited Partnership\n(the "Partnership"), acquired the trademarks and other intellectual property\nof Pizza 73 for $54.04 million (the "Transaction") and Pizza Pizza acquired\nthe operating business of Pizza 73 for $16.21 million. An additional\n$3 million earnout will be paid to the Pizza 73 vendors by Pizza Pizza in July\n2008, provided certain revenue and profitability targets are met. Pizza Pizza\nwill license the trademarks and other intellectual property associated with\nPizza 73 from the Partnership for a 9% royalty payment to the Fund on system\nsales generated by the Pizza 73 restaurants in the royalty pool. The\nTransaction is expected to be immediately 4.0% accretive to the Fund's cash\navailable for distribution per fully diluted unit on a pro forma basis for the\n52 weeks ended April 21, 2007.\n\n\nConcurrent with the closing of the Transaction, the Partnership has\nentered into a credit facility co-led by BMO Bank of Montreal and\nToronto-Dominion Bank to finance a portion of the purchase price payable in\nthe Transaction and to re-finance existing indebtedness. In addition, Michael\nOvers, indirectly, and the Pizza 73 vendors have completed the\npreviously-announced acquisition of an aggregate of 766,392 Units on a private\nplacement basis, for total proceeds to the Fund of approximately...