Cara Operations Limited (TSX:CARA) announced January 23 that it is buying Vancouver-based Keg Restaurants Ltd. (KRL) for $200 million.
KRL operates as The Keg Steakhouse & Bar, with 106 locations in Canada and the United States.
Cara owns several Canadian restaurant brands, including Swiss Chalet, Harvey’s, Milestones, Montana’s, Kelsey’s, Original Joe’s, St-Hubert, Bier Markt and Landing restaurants. The purchase of the Keg will bring Cara’s total portfolio to 1,365 restaurants.
The deal is comprised of $105 million in cash with the remainder in subordinate voting shares based on Cara’s January 22 closing price of $24.93 per share.
David Aisenstat will remain as president and CEO of KRL and will take over the oversight of three other Cara brands – Milestones Restaurants, The Bier Markt and the Landing Group.
Aisenstat has been CEO of the Keg for 20 of the restaurant’s 45 years in business.
Shares of Cara were trading at $26.57 – up more than 6.5% – as of press time.
The transaction is subject to approval of the Toronto Stock Exchange and regulatory bodies.