CANADA – Food brands consolidator Happy Belly Food Group has announced the completion of its acquisition of QSR brand IQ Foods.
The Ontario Superior Court of Justice approved the acquisition.
The acquisition was finalized on September 18, barely two weeks after the initial deal was signed.
It involves an asset purchase agreement valued at CA$85,000 (US$62,713) together with unspecified transaction costs, legal restructuring costs and other customary post-closing adjustments.
These additional costs bring the total value of the acquisition to CA$300,000 (US$221,370). The acquisition is Happy Belly’s largest acquisition of corporate-owned stores.
Happy Belly will also take ownership of IQ Foods’ four prime locations in downtown Toronto.
These Toronto outlets are located at 100 King Street West in First Canadian Place, 18 York Street in the Financial Centre, 199 Bay Street in the Equinox Gym and Fitness Center, and 55 Avenue Road in the Yorkville Equinox Gym and Fitness Center.
These prime outlets have reported a sales growth of 10.3% year-to-date, maintaining what Happy Belly describes as a healthy gross margin. IQ Foods is predicted to record Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of CA$300,000 (US$221,370) post-inclusion of corporate overhead expenses.
The projected system sales for the four locations combined is CA$4 million (US$2.95 million).
The four locations will continue offering options, including bowls, sandwiches, smoothies, soups and salads.
Sean Black, Happy Belly’s CEO, said, “With our current and upcoming prospective locations, we plan to scale IQ Foods operations into 2025 and beyond.”
“Each merger and acquisition transaction and new store opening expands the Happy Belly footprint. With the IQ Foods acquisition, our portfolio will grow to 36 operating restaurants. Five of our brands have multiple locations under construction, driving strong organic growth in 2024.”
Black also praise the move as an extension of its Happy Belly’s aggressive global expansion strategy.
He reiterated the acquisition reflects its balanced approach to both inorganic and organic growth for the next 12 to 18 months.
The CEO announced the food brands consolidator will open more franchised locations before the end of 2024. Apart from other acquisitions, Happy Belly will continue signing new franchise agreements.
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