Aegis Brands (AEG.T) sold their specialty coffee brand, Second Cup Coffee, to Quebec-based Foodtastic today, according to a press release.
Foodtastic makes money under their assorted franchises, of which they have over 130 restaurants and $240 million in annual sales. A few of their franchises include these being Au Coq, La Belle et La Boeuf, Monza, Carlos & Pepe’s, Souvlaki bar, Nickels, and more.
“Second Cup has been a Canadian staple for almost 45 years and we’re excited to welcome them into the Foodtastic family. We look forward to working with all our new franchisees and emerging through this pandemic with a revitalized Canadian leader in the premium coffee segment. This acquisition is consistent with our strategy of acquiring quality Canadian brands with growth potential,” said Peter Mammas, president and CEO of Foodtastic.
Aegis Brands was originally The Second Cup Ltd when it was formed in 1975. They dealt in coffee retailing and franchise options, and enjoyed a decent amount of success. In November 2019, they decided to restructure, and owned and operated the existing Second Cup Coffee company specialty business as part of a portfolio of brands that includes Bridgehead Coffee and Hemisphere Cannabis until the most recent sale. The total cost is $14 million in cash payable on closing, and a post-close earn-out based on royalties from certain Second Cup cafes opened after closing.
“This is a pivotal moment for Aegis Brands. We see many potential opportunities to help talented entrepreneurs and strong brands as they emerge from the challenges of the pandemic. We are excited about the opportunity to uncover new opportunities for growth. Aegis was created with the vision of building a portfolio of amazing brands that can grow and flourish with access to our resources and expertise. We are committed to letting each company operate as an independent brand, while supporting, promoting, and protecting the Company through its many stages of growth.” said Steven Pelton, CEO of Aegis.
Aegis is up 26.7% on the news, closing today at $1.14.