VAUGHN, Ontario – Cara Operations Limited recently acquired a majority ownership interest in Original Joe’s Franchise Group Inc. for C$93 million. Original Joe’s is a multi-brand restaurant company based in Calgary, Alberta.
Cara funded the transaction by drawing on its credit facility, with C$90 million going toward the re-acquisition of Original Joe’s trademarks and royalty rights from Diversified Royalty Corp. According to Cara, Original Joe’s restaurants generate approximately C$250 million in annual system sales and approximately C$14.7 million in normalized operating EBITDA before synergies.
Original Joe’s had 100 restaurants, comprised of 66 Original Joe’s, 24 State & Main and 10 Elephant & Castle locations. One State & Main and six Elephant & Castle locations are in the United States. The remaining restaurants are in Canada and predominantly in Western Canada. Twenty percent of the restaurants are franchised, 44 percent are company owned and 36 percent are partially owned as a joint venture with owner-operators.
“Our existing management team will continue to be located in Calgary, Alberta, and remain in charge of Original Joe’s, however, we are excited about the opportunities our partnership with Cara will bring for our business, associates and franchise partners,” Derek Doke, CEO of Original Joe’s, said in a statement.
The Original Joe’s transaction comes after the successful acquisition of Laval, Quebec-based Groupe St. Hubert Inc., a leading full-service restaurant operator and food manufacturer. The acquisitions will lift Cara’s total annual system sales to C$2.7 billion from C$1.9 billion. Cara also will have 1,227 restaurants in its network with the addition of 122 restaurants from the St. Hubert acquisition and 100 restaurants from the Original Joe’s acquisition. Cara is Canada’s oldest and largest full-service restaurant company with brands including Swiss Chalet, Harvey’s, St-Hubert, Milestones, Montana’s, Kelsey’s, East Side Mario’s, Casey’s, New York Fries, Prime Pubs, Bier Markt and Landing restaurants.
“With the majority of Original Joe’s restaurants located in Western Canada, an area where Cara was previously under-represented, this acquisition complements Cara’s existing network of restaurants,” said Bill Gregson, CEO of Cara’s. “We will now begin combining our scale and expertise in pursuit of synergies and will rely on Original Joe’s proven management team, headed by Derek, to continue running the business.”