MARKHAM, ON, Canada – Aegis Brands Inc. announced that a definitive agreement (the “Definitive Agreement”) has been entered into to acquire St. Louis Bar & Grill for total consideration of $50.0 million, subject to certain closing adjustments (the “Transaction”).
The Purchase Price will be satisfied entirely with cash. Pursuant to the Transaction, Aegis Brands will acquire, indirectly, substantially all of the assets and intellectual property of “St. Louis Bar & Grill” brand and trademark.
St. Louis Bar and Grill is a Toronto based franchised casual dining bar & grill company, operating in 72 locations across 4 provinces. Founded in Toronto in 1992, St. Louis is recognized for its signature wings, ribs, and garlic dill sauce. St. Louis’ neighbourhood restaurants offer exceptionally friendly service in a fun, casual sports bar & grill setting.
St. Louis’ 2023 projected earnings before interest, tax, depreciation and amortization (EBITDA) of $7.6 million implies a 6.6x EBTIDA multiple.
The Purchase Price and the related transaction expenses will be funded through a draw of $30.0 million under the Company’s existing Senior Facility with CWB Financial Group and the balance will be financed through a “best efforts” private placement of Debenture Subscription Receipts and Common Share Subscription Receipts for gross proceeds of $25.0 million (or $28.8 million upon the exercise in full of a 15.0% Over-Allotment Option) with Echelon Capital Markets (“Echelon”) acting as co-lead agent and sole bookrunner, and Canaccord Genuity Corp. acting as co-lead agent (and together with Echelon, the “Agents”) (the “Offering”). Details of the Senior Facility and the Offering are provided below.
“Brent Poulton and his team have done an exceptional job growing and fine-tuning this brand over the years,” said Steven Pelton, President and CEO of Aegis.
“We couldn’t be happier to welcome the brand, the employees and the franchisees of St. Louis into Aegis. Aegis’ intent is to continue to grow the St. Louis brand across Canada and beyond. I admire the culture and vision of the brand and we intend to build-off what has been created.
The store-level economics and exciting growth plans allows St. Louis to fit perfectly into Aegis’ plans to grow and create value for shareholders and we expect this acquisition to be accretive in the first year.
Mr. Poulton built a company that focused on the fundamentals of the restaurant business. This has resulted in a very healthy network of franchised stores which will serve as a strong foundation upon which to grow.”