Happy Belly Food Group, a consolidator of emerging food brands, has completed its acquisition of the Canadian quick service restaurant (QSR) brand IQ Foods, along with its four prime locations in downtown Toronto.
The acquisition, finalised on 18 September 2024, comes weeks after the initial deal was signed on 6 September.
The deal involved an asset purchase agreement valued at C$85,000 ($627,130), along with customary post-closing adjustments, transaction costs and legal restructuring costs.
These brought the final price to C$300,000.
The acquisition has also been approved by the Ontario Superior Court of Justice.
The four IQ Foods locations in downtown Toronto - at 100 King Street West in First Canadian Place, 18 York Street in the Financial Centre, 199 Bay Street in the Equinox Gym and Fitness Center, and 55 Avenue Road in the Yorkville Equinox Gym and Fitness Center - have now joined Happy Belly.
These locations have reported a year-to-date sales growth of 10.3%, maintaining a healthy gross margin with forecasted earnings before interest, tax, depreciation and amortisation of C$300,000 post-inclusion of corporate overhead expenses.
IQ Foods offers options including bowls, sandwiches, smoothies, soups and salads.
The deal represents Happy Belly's largest acquisition of corporate-owned stores to date.
The projected system sales for the four locations combined is C$4m.
Happy Belly CEO Sean Black said: “With our current and upcoming prospective locations, we plan to scale IQ Foods operations into 2025 and beyond.
“Each merger and acquisition transaction and new store opening expands the Happy Belly footprint. With the IQ Foods acquisition, our portfolio will grow to 36 operating restaurants. Five of our brands have multiple locations under construction, driving strong organic growth in 2024.
“This balanced approach of organic and inorganic growth positions us for continued expansion over the next 12 to 18 months. We’re excited to announce several new openings in 2024 as we continue signing franchise agreements and securing prime real estate for our franchisees across Canada.”
