Press release
Cara Operations Limited (TSX:CARA) (“Cara”) announces today that it has acquired a majority ownership interest in Original Joe’s Franchise Group Inc. (“Original Joe’s”) for $93 million. $90.0 million of Cara’s $93.0 million purchase price was used by Original Joe’s to re-acquire its trademarks and royalty rights from Diversified Royalty Corp (TSX:DIV) (“DIV”). Cara has funded its $93.0 million investment in Original Joe’s by drawing on its credit facility.
Derek Doke, President and Chief Executive Officer of Original Joe’s, commented, “Our existing management team will continue to be located in Calgary, Alberta and remain in charge of Original Joe’s, however, we are excited about the opportunities our partnership with Cara will bring for our business, associates and franchise partners.”
Cara’s Chief Executive Officer, Bill Gregson, commented, “With the majority of Original Joe’s restaurants located in Western Canada, an area where Cara was previously under-represented, this acquisition complements Cara’s existing network of restaurants.” Mr. Gregson added, “We will now begin combining our scale and expertise in pursuit of synergies and will rely on Original Joe’s proven management team, headed by Derek, to continue running the business.”
Original Joe’s 100 restaurants generate approximately $250 million in annual System Sales and approximately $14.7 million in Normalized Operating EBITDA before synergies. Now after Cara’s successful acquisition of St-Hubert and Original Joe’s, Cara’s total annual System Sales are projected to increase from $1.9 billion to $2.7 billion. With the addition of 122 restaurants from the St-Hubert acquisition and 100 restaurants from the Original Joe’s acquisition, Cara will have 1,227 restaurants in its network.
About Original Joe’s
Founded in 2000, Original Joe’s is a multi-brand restaurant company based in Calgary, Alberta. As at September 25, 2016, Original Joe’s had 100 restaurants, comprised of 66 Original Joe’s, 24 State & Main and 10 Elephant & Castle locations. 1 State & Main and 6 Elephant & Castle locations are located in the United States – Original Joe’s remaining 93 locations are located in Canada and predominantly in Western Canada. Of the 93 Canadian locations, 19 are in British Columbia, 52 are in Alberta, 8 are in Saskatchewan, 5 are in Manitoba and 9 are in Ontario. Of Original Joe’s 100 total locations, 20% are franchised, 44% are corporately-owned and 36% are partially owned as a joint venture with owner-operators.
