Vancouver, BC – The Keg Royalties Income Fund (the “Fund”) (TSX – KEG.UN) and Keg Restaurants Ltd. (“KRL”) have announced that Fairfax Financial Holdings Limited (“Fairfax”) has agreed to acquire 51% of the common shares of KRL from David Aisenstat. Mr. Aisenstat will continue to own the remaining 49% of the common shares of KRL and he, along with the rest of the current KRL management team, will remain in operational control of KRL.
Completion of the transaction is subject to receipt of all necessary approvals and other customary closing conditions. The transaction is anticipated to be completed in January of 2014.
Paul Rivett, the President of Fairfax, stated: “We are excited at this opportunity to be partnered in one of Canada’s premier restaurant brands. We look forward to working with David and his team to build on the continued success of The Keg”.
“Fairfax will bring additional expertise and resources to The Keg and we are excited at the opportunities available to The Keg moving forward through this relationship” said David Aisenstat, KRL’s President and Chief Executive Officer.
Kip Woodward, Chairman of the Fund, remarked: “Fairfax is a well-known and proven investor in the Canadian market. With the addition of Fairfax to the Keg team, The Keg is well positioned and has a solid foundation for continued growth, which will benefit the Fund and its unitholders.”
The Fund is a limited purpose, open-ended trust established under the laws of the Province of Ontario that, through The Keg Rights Limited Partnership, owns certain trademarks and other related intellectual property used by KRL. In exchange for use of those trademarks, KRL pays the Fund a royalty of 4% of gross sales of Keg restaurants included in the royalty pool.
With approximately 9,500 employees, over 100 restaurants and system sales of approximately $500 million, Vancouver-based KRL is the leading operator and franchisor of steakhouse restaurants in Canada and has a substantial presence in select regional markets in the United States. KRL continues to operate The Keg restaurant system and expand that system through the addition of both corporate and franchised Keg steakhouses. KRL has been named one of the “50 Best Employers in Canada” by Aon Hewitt for the past twelve years.
This press release may contain certain “forward looking” statements reflecting The Keg Royalties Income Fund’s current expectations in the casual dining segment of the restaurant food industry. Investors are cautioned that all forward looking statements involve risks and uncertainties, including those relating to the Keg’s ability to continue to realize historical same store sales growth, changes in market and existing competition, new competitive developments, tax legislation, and potential downturns in economic conditions generally. Additional information on these and other potential factors that could affect the Fund’s financial results are detailed in documents filed from time to time with the provincial securities commissions in Canada.
The Trustees of the Fund have approved the contents of this press release.
For further information:
Neil Maclean, Chief Financial Officer
Tel: (604) 821-6416