Business
Pizza Pizza Limited expands into Western Canada with purchase of Pizza 73 and Pizza Pizza Royalty Income Fund to acquire additional royalty stream
Pizza Pizza Limited expands into Western Canada with purchase of Pizza 73 and Pizza Pizza Royalty Income Fund to acquire additional royalty stream.
About this update from Pizza Pizza Royalty Corp.
[{"type":"text","content":"\n\n\n\n/THIS NEWS RELEASE IS NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR\n\n\nFOR DISSEMINATION IN THE U.S./\n\n\nOntario's "number one pizza" to add 48 restaurants with acquisition of\n\n\nmajor Alberta pizza company\n\n\nTORONTO, June 14 /CNW/ - Pizza Pizza Royalty Income Fund (the "Fund")\n(TSX: PZA.un) and Pizza Pizza Limited ("Pizza Pizza") announced today that\nPizza Pizza has entered into a definitive agreement to acquire Flying Pizza 73\nInc. and its affiliated companies (together, "Pizza 73"). In connection with\nthis transaction, the Fund has entered into a definitive agreement to acquire\nthe trademarks and other intellectual property associated with Pizza 73\nrestaurant 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 are acquiring Pizza 73 for a combined purchase\nprice of $70.25 million. The Fund, through Pizza Pizza Royalty Limited\nPartnership (the "Partnership"), will acquire the trademarks and other\nintellectual property of Pizza 73 for $54.04 million (the "Transaction") and\nPizza Pizza will acquire the operating business of Pizza 73 for\n$16.21 million. An additional $3 million earnout will be paid to the Pizza 73\nvendors by Pizza Pizza in July 2008, provided certain revenue and\nprofitability targets are met. Pizza Pizza will license the trademarks and\nother intellectual property associated with Pizza 73 from the Fund for a 9%\nroyalty payment to the Fund on system sales generated by the Pizza 73\nrestaurants in the royalty pool. The Transaction is expected to be immediately\naccretive to the Fund's distributable cash per unit. The Transaction between\nthe Fund and Pizza Pizza will be considered a related party transaction under\nOSC Rule 61-501 ("61-501") and Autorite des marches financiers Policy 27\n("Q-27"). A special meeting of unitholders is expected to be held in late July\nto approve the Transaction, which is subject ...