Aegis Brands has entered into a purchase agreement to sell its specialty coffee brand Second Cup Coffee Co to the Quebec-based Foodtastic, an emerging leader in the Canadian restaurant franchising industry.
“Second Cup has been a Canadian staple for almost 45 years and we’re excited to welcome them into the Foodtastic family,” says Peter Mammas, President and CEO of Foodtastic.
“We look forward to working with all our new franchisees and emerging through this pandemic with a revitalised Canadian leader in the premium coffee segment. This acquisition is consistent with our strategy of acquiring quality Canadian brands with growth potential.”
The purchase price under the transaction consists of C$14 million (about US$11 million) in cash payable on closing, subject to customary closing adjustments, as well as a post-closing earn-out based on royalties earned from certain Second Cup cafés opened following closing. Aegis says the transaction will significantly strengthen its balance sheet and permit the company to accelerate its previously announced growth strategy through accretive acquisitions.
“We are pleased that the Second Cup brand and franchisees have the opportunity to evolve with a new Canadian partner,” says Steven Pelton, President and CEO of Aegis.
“At Aegis we will now focus on further development of Bridgehead Coffee and Hemisphere Cannabis, while seeking out exciting new growth and acquisition opportunities.”
Aegis inherently believes in the power of the entrepreneur. Future acquisition targets will ideally have a strong vision for their brand and the founder at the helm.
“This is a pivotal moment for Aegis Brands. We see many potential opportunities to help talented entrepreneurs and strong brands as they emerge from the challenges of the pandemic,” says Pelton.
“We are excited about the opportunity to uncover new opportunities for growth. Aegis was created with the vision of building a portfolio of amazing brands that can grow and flourish with access to our resources and expertise. We are committed to letting each company operate as an independent brand, while supporting, promoting, and protecting the Company through its many stages of growth.”