MONTREAL — Foodtastic Inc. has signed a deal to buy healthy fast food restaurant chain Freshii Inc. for $74.4 million.
Foodtastic CEO Peter Mammas says Freshii will help Foodtastic expand into a new category.
The Montreal-based restaurant franchisor behind brands like Second Cup, Pita Pit and Milestones also recently announced plans to acquire Quesada Burritos & Tacos.
Freshii says the deal will see Foodtastic pay $2.30 per share in cash, representing a total of $74.4 million on a fully diluted basis.
The company says the amount represents a 148 per cent premium on its 20-day volume-weighted average share price for the period ending Friday and a 142 per cent premium to its closing price Friday.
Stephen Smith, chair of a special committee of independent directors that oversaw the negotiation for Freshii, says the all-cash deal delivers immediate and certain liquidity to Freshii shareholders at a price that represents a significant premium to the market price of shares.
Freshii CEO Daniel Haroun says the transaction "recognizes the tremendous value of the Freshii brand."
"We believe that Freshii’s brand, franchise network and talent will benefit from Foodtastic’s greater scale," he said.
The company says it operates 343 locations in North America and internationally.
Last fall, Freshii announced plans to buy a majority stake in health and wellness product retailer Natura Market ECommerce Inc., with rights to acquire the rest of the business through the first quarter of 2025.
It said it would pay $5.7 million plus potential performance incentives in return for the initial 60 per cent stake.
Haroun said Freshii's acquisition by Foodtastic will generate additional opportunities for Freshii's consumer packaged goods business.
This report by The Canadian Press was first published Dec. 19, 2022.
Companies in this story: (TSX:FRII)
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