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Imvescor Restaurant Group Issues Letter to Shareholders and Files

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Imvescor Restaurant Group Issues Letter to Shareholders and Files Notice of Special Meeting of Shareholders and Management Information Circular

Canada NewsWire

MONTREAL, Jan. 12, 2018 /CNW Telbec/ - Imvescor Restaurant Group Inc. (TSX: IRG) (”IRG” or the “Company”) today issued a letter to the shareholders of the Company (the ”Shareholders”) and filed its management information circular (the “Circular”) with the securities regulatory authorities in each of the provinces and territories of Canada in preparation for its special meeting of shareholders (the “Meeting”) to be held on Monday, February 19, 2018 at 11:00 a.m. (Montréal time) at Hotel Ruby Foo’s, 7655 Décarie Boulevard, Montreal, Québec, H4P 2H2.

At the Meeting, the Shareholders will be asked to approve the previously announced amalgamation (the “Amalgamation”) under Section 181 of the Canada Business Corporations Act involving the Company and an entity to be incorporated which will be a direct or indirect wholly-owned subsidiary of MTY Food Group Inc. (”MTY”) in accordance with the terms of the combination agreement dated December 11, 2017 (the ”Combination Agreement”) entered into between the Company and MTY.

Shareholders of record as at the close of business on January 3, 2018 will receive notice of and be entitled to vote at the Meeting. The Circular, which shareholders are expected to receive in the coming days, provides information on, among other things, the Amalgamation and voting procedures. Completion of the Amalgamation is conditional upon approval of at least two-thirds (662/3%) of the votes cast by the holders of common shares of the Company present in person or represented by proxy at the Meeting and entitled to vote and satisfaction of other customary closing conditions. It is expected that the Amalgamation will be completed in the first half of calendar year 2018.

The board of directors of the Company has unanimously determined that the Amalgamation is in the best interests of the Company and unanimously recommends, for the reasons set out in the Circular, that the Shareholders vote FOR the special resolution to approve the Amalgamation well in advance of the voting deadline of 5:00 p.m. (Montreal Time) on February 15, 2018. Reference is made to the letter to Shareholders included in the Circular and available on the Company’s website at and on the Company’s issuer profile at A copy of the letter to Shareholders is also included below.

Letter to the shareholders of Imvescor Restaurant Group Inc.

Dear fellow shareholders,

You Have a Value Creation Opportunity

Participate in the upside of a stronger, more diversified restaurant franchisor

On December 12, 2017, we announced an exciting next step for our company – an amalgamation with MTY to create a leading North American restaurant franchisor with a strong balance sheet and significant growth potential. The transaction offers our shareholders:

  • Immediate value and future upside – with the offer to be paid approximately 20% in cash and approximately 80% in MTY shares, shareholders will receive immediate value and liquidity, and the opportunity to participate in the future upside of the new amalgamated company: a leading restaurant franchisor in a good position to generate future growth and face industry pressures;
  • Enhanced liquidity - upon the completion of the amalgamation, the combined company will have a broader shareholder base with increased market liquidity and a larger public float;
  • Fair value – as determined by an independent fairness opinion.

The amalgamation is already more valuable to shareholders today than when it was first announced on December 12, 2017.

  • Based on the five-day volume-weighted average trading price of MTY Shares as of January 11, 2018, the last trading day prior to the date of the circular, the total consideration represents $252 million to existing shareholders, or an enterprise value of $267 million, offering shareholders an equivalent of $4.16 per IRG share.
  • This represents a premium of 15.6% based on the five-day volume-weighted average trading price of MTY Shares as of January 11, 2018, the last trading day prior to the date of the circular, and the unaffected IRG share price on October 26, 2017, compared to an initial premium of 13.3% on the announcement day.
  • The EBITDA multiple applied to this transaction reflects one of the highest business valuation EBITDA multiples identified in comparable transactions of businesses operating in the quick service restaurant and casual dining segments of the restaurant industry in recent years: 15.0x Fiscal 2017 EBITDA of $17.5 million or 15.2x based on the five-day volume-weighted average trading price of MTY Shares as of January 11, 2018, the last trading day prior to the date of the circular.

Through the share exchange offered, IRG shareholders gain exposure to the future growth potential of the amalgamated company - a multi-brand industry leader with a portfolio of over 5,700 stores under 75 brands, $2.9 billion in System Sales and anticipated annual EBITDA in the range of approximately $125 - $130 million.

Note that MTY shares have increased in value 152% over the last five-year period ending December 31, 2017 and 11% over the last one-year period ending December 31, 2017. Over the same periods the business has generated total returns of 161% and 12% respectively.

The Amalgamation is the right move for IRG and its shareholders

This value-creating transaction is the culmination of over three years of hard work, commitment and dedication by IRG’s management, employees and franchisees. Many of you will remember that Frank Hennessey was named CEO in September of 2014. At that time, we had just concluded a strategic review process that found no interested buyers for a company with negative growth, declining key performance metrics, and a share price hovering at $1.73. This is in sharp contrast to the value offered to shareholders today with the MTY offer.. The value offered to shareholders of IRG is a result of the successful execution of our ongoing turnaround strategy.

Synergy + Size + Scale = Accelerated Growth Potential

While we believe that more growth could be possible for IRG, we need to be realistic about the amount and rate at which further organic growth can occur within our key business areas. Competition is coming from the highly-consolidated grocery sector that is aggressively competing for consumers’ “share of mouth”. Further, the changes to the minimum wage in Ontario effective at the beginning of this year could have a negative financial impact on franchisees and limit the company’s ability to grow in the Ontario market.

Given these headwinds, as well as the limited opportunities for meaningful growth that can come from synergistic and complementary acquisitions, our pace of growth as a stand-alone company may decelerate. 

In contrast, a combined IRG and MTY will have the enhanced ability to face the challenges noted above and the requisite size, scale, geographic reach and balance sheet needed to succeed in an increasingly challenging operating environment, where purchasing power, synergies and acquisition capabilities matter even more.

Join the IRG Board and Major Shareholders in Supporting the Amalgamation with MTY

For all the reasons set out in the management information circular, the Board is unanimous in its support of this transaction. As set out in the section entitled “The Amalgamation - Background to the Amalgamation” of the circular, we did not reach this conclusion lightly. Over the past three plus years, as part of the Board’s mandate to strengthen the business and enhance value for the company’s shareholders, the Board has regularly reviewed IRG’s corporate strategy and considered various strategic options and other opportunities that may be in the best interests of the company. This included extensive strategic review processes in 2014 and 2016 considering potential opportunities with strategic partners and selected private equity firms in Canada and in the United States.

Based on this in-depth work canvassing the market in recent years, the extensive negotiations with MTY to surface the greatest possible value for shareholders, and the other reasons outlined in the circular, the proposed amalgamation with MTY is the best strategic alternative available to IRG shareholders.

We encourage you to carefully read the circular, including the sections entitled “The Amalgamation - Background to the Amalgamation” and “The Amalgamation - Reasons for the determinations and recommendations”, which contain a summary of the main events that led to the execution of the combination agreement and certain meetings, negotiations, discussions, suspensions, pauses and other similar actions of the parties that preceded the public announcement of the amalgamation on December 12, 2017.

In order to receive the value from the transaction with MTY, I urge you to vote FOR the Amalgamation Resolution well in advance of the voting deadline of 5:00 p.m. (Montréal Time) on February 15, 2018. Together with MTY, IRG will be best positioned to grow and create value for all shareholders..

You can vote your proxy on the dedicated voting page on our website If you require any assistance in voting your proxy please contact Kingsdale Advisors, our strategic shareholder advisor and proxy solicitation agent, at 1-855-682-2023 toll-free in North America, or 416-867-2272 outside of North America, or by email at .(JavaScript must be enabled to view this email address).

On behalf of the entire Board, I thank you for your support over the last few years as we worked hard to turnaround our company and surface the value of our portfolio.  It is because of the outstanding efforts of our franchisees, employees and management team that we are in a position to take this next step. Today, as a shareholder, your patience is being rewarded.

Signed by François-Xavier Seigneur, Chairman of the Board of Directors


The information contained in this press release includes some measures that are not performance measures consistent with International Financial Reporting Standards (”IFRS”). The key performance metrics and non-IFRS measures include measures that are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS. Because the measures included in the key performance metrics and the non-IFRS measures do not have standardized meanings prescribed by IFRS, they may not be comparable with similar measures presented by other issuers.

Key Performance Metric

“System Sales” represents the net sales received from restaurant guests at both corporate and franchise restaurants including take-out and delivery customer orders. System Sales includes sales from both established restaurants as well as new restaurants. The Company’s management believes System Sales provides meaningful information to investors regarding the size of the restaurant networks, the total market share of the brands and the overall financial performance of the brands and restaurant owner bases.

Non-IFRS Measure

The Company uses non-IFRS measures to complement IFRS measures, to provide investors with supplemental information of its operating performance and to provide further understanding of the Company’s results of operations from management’s perspective. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Non-IFRS measures should not be considered in isolation nor as a substitute for an analysis of the Company’s financial information reported under IFRS. The definition and rationale for the use of the non-IFRS measure used by the Company in this press release is as follows:

“EBITDA” is defined as earnings or loss before interest income, interest expense, depreciation and amortization and income tax expense. The Company believes this measure is used by investors to compare and value companies in the Company’s industry. The Company uses EBITDA because the measure enables management to assess the Company’s operational performance and is a financial indicator of the Company’s ability to service and incur debt. The most comparable IFRS financial measure is results from operating activities. Refer to the “Reconciliations of Non-IFRS Measures” section of the Company’s management’s discussion and analysis for the 13 and 52 weeks ended October 29, 2017 available on the Company’s website at and on the Company’s issuer profile at for more details.


This press release contains forward-looking statements, including, but not limited to, statements relating to IRG’s expectations with respect to the timing and outcome of the Amalgamation, within the meaning of applicable law (collectively referred to herein as “forward-looking statements”). Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans relating to the Amalgamation and other future events and conditions and readers are cautioned that such statements may not be appropriate for other purposes. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, “intends”, “projects”, “seeks”, “likely” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”.

Specifically, without limiting the generality of the foregoing, all statements included in this press release that address activities, events or developments that IRG expects or anticipates will or may occur in the future, including receipt of the required Shareholder approval and regulatory approvals for the Amalgamation, the anticipated timing for the Meeting and the anticipated effective date of the Amalgamation, the anticipated effects and benefits of the Amalgamation, certain strategic benefits and operational and competitive and cost synergies, the ability of IRG and MTY to satisfy the conditions to complete the Amalgamation and other statements that are not historical facts are forward-looking statements. These statements are based upon assumptions and are subject to certain material risks and uncertainties. In addition, the anticipated dates provided throughout this press release may change for a number of reasons, such as unforeseen delays or the need for additional time to satisfy conditions for the completion of the Amalgamation.

Although IRG believes that the expectations represented in such forward-looking statements are based on reasonable assumptions, there can be no assurance that such expectations will prove to be correct. Since forward-looking statements address future events and conditions, they involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Risks and uncertainties inherent in the nature of the Amalgamation include the failure to satisfy the conditions for the completion of the Amalgamation, in a timely manner, on satisfactory terms, or at all, including that there be no material adverse effect with respect to the Company. Failure of the parties to otherwise satisfy the conditions to or complete the Amalgamation may result in the Amalgamation not being completed on the proposed terms, or at all. In addition, if the Amalgamation is not completed and the Company continues as an independent entity, there are risks that the announcement of the Amalgamation and the dedication of substantial resources of the Company to the completion of the Amalgamation could have an impact on the Company’s current business relationships and could have a material adverse effect on the current and future operations, financial condition and prospects of the Company. Furthermore, the failure of the Company to comply with the terms of the Combination Agreement may, in certain circumstances, result in the Company being required to pay the termination fee or expenses thereto. For all these reasons, Shareholders should not place undue reliance on the forward-looking statements contained in this press release.

Forward-looking statements contained in this press release are made as at the date of this press release and, other than as specifically required by law, the Company does not assume any obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which such statement is made, or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results, or otherwise. The forward-looking statements contained in this press release are expressly qualified by these cautionary statements.

Shareholders are cautioned that the foregoing list of risks and uncertainties is not exhaustive of the risks and uncertainties that may affect forward-looking statements. Additional information on other risks and uncertainties that could affect the operations or financial results of the Company or MTY, which, in turn, could potentially impact the satisfaction of the conditions to the completion of the Amalgamation, are included in reports on file with applicable securities regulatory authorities, including, but not limited to, under the section entitled “Risks and Uncertainties” of the Company’s Management’s Discussion and Analysis for the 13 and 52 weeks ended October 29, 2017 and under the section “Risk Factors” in the Company’s most recent annual information form, which documents are available on SEDAR at under IRG’s issuer profile, and under the section “Risks and uncertainties” of MTY’s Amended and Restated Management Discussion and Analysis for the three and nine-month periods ended August 31, 2017 and the Amended and Restated Management Discussion and Analysis for the year ended November 30, 2016 which is available on SEDAR at under MTY’s issuer profile. Shareholders are also cautioned to consider these and other risks and uncertainties carefully and not to put undue reliance on forward-looking statements contained in this press release that could be impacted by those risks and uncertainties. The information contained in the Circular includes factors that could affect the completion of the Amalgamation. You are urged to carefully consider those factors. For a discussion regarding such risks and uncertainties, please refer to the section “Risk factors” of the Circular.


IRG is primarily engaged in the business of franchising and developing a system of distinctive family/mid-scale dining, casual-dining and take-out and delivery restaurants serving high quality food. IRG’s restaurants operate under the Pizza Delight®, Toujours Mikes, Scores®, Bâton Rouge® and Ben & Florentine® brands. IRG’s business which consists primarily of franchised restaurants and company-owned restaurants, including both take-out and sit-down restaurants licensed to serve alcohol, and also includes licensed retail products manufactured and sold by third parties under licence under the Pizza Delight®, Toujours Mikes, Scores® and Bâton Rouge® brands. IRG’s network of restaurants are easily identified by the Pizza Delight®, Toujours Mikes, Scores®, Bâton Rouge® and Ben & Florentine® banners and have established a high recognition throughout the communities they each respectively serve.














Our brands:


Pizza Delight®:




Toujours Mikes:


Bâton Rouge®:


Ben & Florentine®:



SOURCE Imvescor Restaurant Group Inc.


CONTACT: Imvescor Restaurant Group Inc.: 514.341.5544,; Shareholders: Kingsdale Advisors, 1-855-682-2023 toll-free in North America, 416-867-2272 outside of North America, Email: .(JavaScript must be enabled to view this email address); Media Relations: ACJ Communication - Daniel Granger 514.840.7990

Web Site:


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Posted on Jan 13, 2018 - 03:05 AM • Print