MTY Food Group Inc., a Montreal-based restaurant operator, continued its move into the U.S. market on Friday with an agreement to buy BF Acquisition Holdings LLC, the owner of Baja Fresh Mexican Grill and La Salsa Fresh Mexican Grill.
MTY will pay $27 million in cash for the company, and the deal is expected to close in the next 30 days.
The acquisition follows MTY’s purchase of multi-concept franchisor Kahala Corp. for $300 million this summer. MTY CEO Stanley Ma hinted at further efforts to expand the operator’s reach.
“Following the addition of Kahala last month, MTY intends to continue and accelerate its growth throughout North America, leveraging both its U.S. platforms and Canadian platforms to acquire profitable restaurant concepts,” Ma said in a statement. “The acquisition of Baja Fresh Mexican Grill and La Salsa Fresh Mexican Grill perfectly aligns with our growth strategy, and is one more step towards building a bigger and better organization for the future.”
The owner of Baja Fresh had been looking for a buyer for some time, and the chain was for sale as far back as 2011. Baja Fresh was one of the more promising fast-casual Mexican concepts in the country when what is now The Wendy’s Co. snapped it up for $275 million in 2002.
But Irvine, Calif.-based Baja Fresh struggled, and founder David Kim bought the chain back for $31 million four years later. At the time, Baja Fresh had 255 locations, split between company-owned and franchised units.
Baja Fresh currently has 162 restaurants, while La Salsa has 23 units. All but 16 of the combined 185 locations are franchised. The two chains had $145 million in system sales in 2015, according to the release.
MTY operates numerous brands in a variety of formats and menu styles, including ManchuWok, Big Smoke Burger, Extremepita, Madisons New York Grill & Bar and Tosto Quickfire Pizza and Pasta. It also operates the frozen yogurt chain TCBY in Canada.
With its recent acquisitions, MTY is quickly becoming a major player in the U.S. restaurant business. After the Kahala purchase, the company acquired frozen-treat chains Pinkberry and Cold Stone Creamery, as well as smoothie chain Planet Smoothie.
MTY operates 57 brands in the U.S. and Canada, and will operate two more when the Baja Fresh and La Salsa deal is complete.
Contact Jonathan Maze at [email protected]
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