Chicken lovers rejoice…the Quebec-based St-Hubert restaurant business has agreed to be acquired by the owner of the Swiss Chalet chain(Cara Operations Ltd.) for $537 million, giving it a major presence in Quebec including a chain of franchised restaurants, a food manufacturing and distribution business and about 10,000 employees.
St-Hubert Inc. will fit well with its business, says Cara, which in addition to Swiss Chalet includesmany well-known restaurant brands such as Harvey’s and Milestones.Cara has 1,010 franchised and corporate restaurants, including 37 located outside Canada. Under the deal, it will add St-Hubert’s 117 restaurants , all but nine in Quebec, which operate in several formats including traditional full-service rotisseries.
St-Hubert competed directly in some markets with Swiss Chalet in some markets as they are so similiar…think rotisserie chicken and a secret sauce — but in recent years the two companies have focused on different geographic areas.
(PIC: Flickr / Krista)
The Toronto-area company, based in Vaughan, says it will use St-Hubert’s head office in Laval as its base in Quebec, where Cara has relatively little presence.
Cara also sees St-Hubert’s food manufacturing business — which makes two-thirds of its sales through corporate customers such as Sobeys, Loblaw, Costco and Metro — as a major growth opportunity and the Cara chairman called the new deal “an excellent fit” for both companies.
St-Hubert’s Chairman and CEO called the dea one that provides more opportunities for employees “by creating jobs in Quebec, since it will enable us to carry out major expansions of our food manufacturing programs and sales throughout Canada”.
Part of the price that Cara will pay is $50 million of its subordinate voting shares. The bulk of the transaction will be borrowed by Cara from Scotiabank and a syndicate of lenders. Cara said it also believes it will issue more stock, if market conditions are right.
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