Parkland Expands Food Offer and Accelerates Convenience Growth with Acquisition of M&M Food Market
Parkland Expands Food Offer and Accelerates Convenience Growth with Acquisition of M&M Food Market
Calgary, AB / CNW / – Parkland Corporation, a leading operator and consolidator of convenience retail and fuel marketing businesses, recently announced it has entered into an agreement to acquire M&M Food Market. M&M is a premium, restaurant-quality frozen food retailer who brings high-quality, convenient food choices to Canadians. This acquisition represents one of many steps Parkland Corporation is taking in a retail diversification strategy to expand its proprietary food offer, customer reach and innovation pipeline.
“This acquisition provides a platform to grow our food offer, expand our proprietary brands, and advance our digital and loyalty strategy,” said Ian White, SVP strategic marketing & innovation. “Consistent with our commitment to create convenience destinations, M&M’s national store network, and innovative approach to food preparation and menu development, positions us to offer high-quality food that complements our growing quick-serve restaurant offerings. We will grow these capabilities in all our operating regions and bolster our digital connection to customers by combining M&M and JOURNIE rewards programs. We look forward to bringing ON the RUN and M&M together to help customers make the most of every stop.”
The acquisition includes over 300 well-located standalone franchise and corporate owned stores, over 2,000 M&M Express locations, and a well-established rewards program with approximately two million active members. Led by an experienced management team who have a proven track record of growth and a food-first culture, M&M will create quality food options that customers can consume fresh-from-frozen, both on site and on the go, and prepared from frozen at home. Parkland Corporation will leverage these capabilities throughout its existing network and soon to be launched standalone ON the RUN convenience locations.
“Parkland’s ON the RUN brand is a convenience retail leader and we are excited to combine our two offerings,” said Andy O’Brien, CEO of M&M. “M&M and its franchise partners share Parkland’s customer focus and passion for quality food. The combination of our innovative food capabilities and Parkland’s more than 3,000 retail locations in 25 countries creates an immediate runway of growth and expansion opportunities.”
This acquisition enables key elements of Parkland Corporation’s strategy:
- Advances enterprise food strategy: Adds a proprietary brand, experienced team, franchisee network, and a scalable fresh and fresh-from-frozen food growth platform across all markets, leveraging M&M’s expertise and track record of developing successful menus in its innovation kitchen to evaluate and develop additional fresh and quick-serve food choices.
- Advances digital strategy and creates a premier Canadian loyalty program: Combining JOURNIE and M&M’s reward program, which has two million active members, will create extensive cross-promotional opportunities and form one of Canada’s premier loyalty programs.
- Enhances the ON the RUN customer value proposition: M&M will be integral to growing the On the Run network, bolstering in-store, e-commerce and home delivery offers, and supporting the standalone convenience concept.
- Capital-light: M&M leverages a well-established, highly efficient food preparation and distribution network, requiring limited capital investment to efficiently serve its retail locations.
- Ratable cash flow with significant growth potential: M&M’s royalty fee-based operating model creates a ratable stream of cash flow. Parkland Corporation aims to grow M&M’s Canadian annual run rate adjusted EBITDA to approximately $55 million in three years.
The total consideration for this transaction is approximately $322 million, which will be funded out of existing credit facility capacity. This acquisition represents a valuation metric of less than 8.5x estimated 2021 adjusted EBITDA. Subject to approval under the Competition Act (Canada) and other customary closing conditions, the acquisition is expected to close in the first quarter of 2022.
