VAUGHAN, ON, Aug. 31, 2015 /CNW/ - Cara Operations Limited (TSX:CAO) ("Cara") is pleased to announce that on August 31, 2015 it entered into a purchase agreement to acquire a 100% interest in New York Fries from 122164 Canada Ltd. The anticipated close date for the transaction is the fall of 2015.
About New York Fries
With 120 locations in Canada and another 36 abroad, New York Fries is one of Canada's most successful QSR concepts. New York Fries was founded in 1984 by Jay Gould and his brother Hal, who recognized that an opportunity existed in the market for premium fresh cut fries. Since its inception, New York Fries has differentiated itself by using fresh, high quality ingredients cooked to order and as a result, has established a leadership position in the Canadian french fry and poutine market. Following the success of New York Fries, Jay Gould launched South St. Burger Co. ("SSBC") in 2005; SSBC is not part of this transaction. Jay Gould, founder and President of SSBC commented, "Cara is one of the most respected names in the Canadian Foodservice industry and I am excited to have them take over New York Fries and continue to grow it. For my part, I will continue to build South St. Burger using the same principles that have worked so well all these years for New York Fries".
Cara Acquisition and New York Fries Integration
New York Fries is an attractive acquisition for Cara as it seeks to expand its holdings following the successful IPO in April 2015. Cara is acquiring New York Fries for cash consideration which will be funded through Cara's existing credit facility. The acquisition is accretive for Cara shareholders. The addition of New York Fries also helps diversify Cara's portfolio of stores into shopping centers where Cara's existing 10 brands currently have limited presence.
"New York Fries has a strong track record of growth, profitability and product development. New York Fries has both corporate and franchise stores in Canada plus international franchises. With the combination of the two companies, the New York Fries head office relocating to Cara's head office and an 'all cash' financed acquisition, this transaction will be accretive for Cara's shareholders," commented Cara's Chief Executive Officer, Bill Gregson.
New York Fries' head office will be relocated to Cara's existing head office in Vaughan, Ontario and its business and back-end processes will be integrated into Cara's over the course of the next 12 months. Warren Price, New York Fries' long-time Executive Vice-President (who will be joining Cara to continue to lead the New York Fries brand) commented, "We are looking forward to joining the Cara network and are excited about the possibilities this new venture will bring for the New York Fries business, our associates and franchise partners".
Certain statements in this Press Release may constitute "forward-looking" statements within the meaning of applicable Canadian securities legislation which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Cara or the industry in which they operate, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this Press Release, such statements use words such as "may", "will", "expect", "believe", "plan" and other similar terminology. These statements reflect management's current expectations regarding future events and operating performance and speak only as of the date of this Press Release. These forward-looking statements involve a number of risks and uncertainties, including those related to: (a) Cara's ability to maintain profitability and manage its growth including SRS Growth, System Sales Growth, increases in net income, Operating EBITDA and Operating EBITDA Margin on System Sales (b) competition in the industry in which Cara operates; (c) the general state of the economy; (d) integration of acquisitions by Cara; (e) risk of future legal proceedings against Cara. These risk factors and others are discussed in detail under the heading "Risk Factors" in Cara's long form prospectus dated March 31, 2015. New risk factors may arise from time to time and it is not possible for management of Cara to predict all of those risk factors or the extent to which any factor or combination of factors may cause actual results, performance or achievements of Cara to be materially different from those contained in forward-looking statements. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. Although the forward-looking statements contained in this Press Release are based upon what management believes to be reasonable assumptions, Cara cannot assure investors that actual results will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this Press Release.
Founded in 1883, Cara is Canada's oldest and largest full-service restaurant company. Cara is a publicly traded company and it franchises and/or operates restaurant brands including Harvey's, Swiss Chalet, Kelsey's, East Side Mario's, Montana's, Milestones, Prime Pubs, Casey's, Bier Markt, and Landing restaurants. As at June 28, 2015, Cara had 827 restaurants across Canada, 89% of which are operated by franchisees. Cara's restaurants are located across Canada with 72% of Cara's locations based in Ontario. More information about Cara is available at www.cara.com.
SOURCE Cara Operations Limited