By Abigail Summerville
(Reuters) -Canada’s MTY Food Group, owner of restaurant chains including Pinkberry and Cold Stone Creamery, has hired Toronto Dominion Bank to explore a sale, according to people familiar with the matter, who asked not to be named because the process is confidential.
THE DETAILS
* The Montreal-based company operates or franchises over 80restaurant chains, including Wetzel’s Pretzels, Papa Murphy’sand TacoTime, in North America and internationally. * It has 7,061 locations, 256 of which are company ownedwith the rest franchised. * MTY said it does not comment on market rumors orspeculation. TD Bank did not immediately respond to requests forcomment.
THE NUMBERS
* MTY has a market value of nearly $550 million. * Any deal would likely command a premium to its marketvalue, the sources said. * MTY’s stock has lost almost a quarter of its value so farthis year. * For the third quarter ended August 31, MTY’s revenueincreased by about 1% year-over-year to $297 million, while itsnet income attributable to owners fell by about 20% to $27.9million, or $1.22 per diluted share.
THE BACKGROUND
* MTY Chairman Stanley Ma founded the company in 1979 withjust one restaurant location. * He served as CEO from 2004 to 2018 and is the company’slargest shareholder with a 13.9% stake, according to LondonStock Exchange Group data. * Private equity firms have been big buyers of franchisedrestaurant chains in recent years, attracted to their steadyroyalty fees. * The quick-service restaurant industry has weakened ascash-strapped consumers cut out eating away from home.
(Reporting by Abigail Summerville in New York. Editing by Dawn Kopecki and Susan Fenton)
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