Pizza Pizza buys slice of Western Canada
The Pizza Pizza chain said Thursday it is taking a piece of the Western Canadian market with a deal to buy the Edmonton-based Flying Pizza 73 Inc. chain.
Pizza Pizza Royalty Income Fund said it will pay about $70.3 million for the chain, including $54 million for trademarks and intellectual property, plus over $16 million for the operating business.
Another $3 million may be paid out to Pizza 73 vendors in July 2008 if they meet revenue and profit targets.
Pizza 73 has 48 outlets in its system. The company produced $65 million in revenues for the 12 months that ended April 21.
Pizza Pizza operates 532 restaurant locations, predominantly in Ontario and Quebec.
"Pizza Pizza has been working on a Western Canadian expansion plan, as announced at the time of the fund's initial public offering in 2005," said company chairman Michael Overs.
"This represents an ideal acquisition for Pizza Pizza, as Pizza 73 has achieved impressive growth and is a market leader in the Alberta [quick service restaurant] pizza sector, and the Pizza 73 brand is well recognized throughout Alberta," Overs said in a release.
Units of Pizza Pizza slipped 12 cents on the TSX to close at $9.32.