Restaurant operator MTY Food Group Inc. will acquire Papa Murphy’s, the Vancouver-based take-and-bake pizza chain, the companies announced Thursday morning.
MTY will acquire all shares of Papa Murphy’s stock for cash at $6.45 per share, for a total transaction cost of approximately $190 million, according to terms outlined in a press release.
Papa Murphy’s is headquartered in Vancouver and was originally founded in 1981 in Hillsboro, Ore., under the name Papa Aldo’s. The company adopted the Papa Murphy’s moniker after merging with another take-and-bake pizza chain called Murphy’s Pizza in 1995.
The company went public in 2014, but has been struggling in recent years to keep up in an increasingly competitive casual food industry, and its stock price has hovered around $5 per share. The chain introduced a number of measures aimed at becoming more competitive in the past year, including an online ordering platform and delivery services from some locations.
The possibility of a sale of the business was first raised last fall, when the company announced that it had hired a consultant to undertake a review of “strategic alternatives.” No information about the progress of the review was disclosed until today.
“The board of directors and our advisors have thoroughly evaluated all options available to us and are confident that this agreement provides immediate value to our stockholders at a premium over our current share price,” Papa Murphy’s board chair Jean Birch said in the press release. “Merging our unique, differentiated brand with a global leader in franchised restaurant concepts will accelerate on-going efforts to enhance our convenience and relevance and maintain our position as the number one Take ‘n’ Bake pizza chain in the United States.”
MTY is based in Canada and owns a large catalog of restaurant brands operating primarily in North America, including Taco Time, Baja Fresh, Cold Stone Creamery, Blimpie subs, and the Pinkberry and TCBY frozen yogurt brands. The company’s franchises operate 5,941 locations, according to the press release, including more than 500 locations outside of North America. Papa Murphy’s catalog would add another 1,331 franchised locations to that total.
MTY was founded in 1979 as the parent entity of a Canadian restaurant called Le Paradis du Pacific, and developed several other franchises through the 1980s and 1990s. It began acquiring other brands in 1999, and went public on the Toronto stock exchange in 2010. Its annual sales were reported to have reached $1.07 billion in 2015.
The merger has been unanimously approved by the boards of directors of both companies, but will still need approval from regulators.