Quebec food court champion MTY Foods takes a bite out of U.S. market with US$300 million Kahala acquisition

, International

MTY Foods will pay about US$300 million to acquire Kahala Brands Ltd. and 18 brands such as Cold Stone Creamery, America's Taco Shop and Kahala Coffee Traders.

MONTREAL — With the patience of a hungry customer who carefully looks over the restaurants at a food court before ordering a meal, MTY Food Group Inc. has acquired the Arizona-based Kahala Brands Ltd. franchise company, which will finally bring it into the U.S. market in a big way.

MTY has been looking to grow, and on Wednesday the Montreal-based company announced it has paid US$300 million for Kahala in a friendly deal that will add 18 brands to its current 30 restaurant banners, familiar to just about anyone who has been to a mall or airport across Canada, including Mr. Sub, Thai Express and Jugo Juice.

At the moment, MTY has just 80 stores in the U.S., but with the Kahala banners it will add close to 2,000 in July when the deal is expected to close.

“The two companies share the same philosophy, the same platform and same background. I think it’s the perfect fit,” said MTY founder and CEO Stanley Ma in an interview with the Financial Post, adding that the headquarters will be staying in the Montreal area.

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