A&W Revenue Royalties Income Fund and A&W Food Services of Canada Inc. have successfully completed a strategic combination, giving rise to A&W Food Services NewCo, a publicly traded, growth-oriented quick-service restaurant (QSR) franchisor. This marks a significant milestone for A&W Food Services and its shareholders, paving the way for enhanced growth initiatives and increased value creation.
“The creation of a new public QSR company marks an exciting step in our journey to unlock even greater restaurant success and bring the great taste of A&W Food to even more Canadians,” said Susan Senecal, President and Chief Executive Officer of A&W Food Services NewCo and the Fund.
Transaction Details and Shareholder Benefits
The transaction received overwhelming support from the Fund’s unitholders and secured final court approval, demonstrating confidence in the strategic direction of A&W Food Services NewCo. As a result, the Fund units will be delisted from the Toronto Stock Exchange (TSX), and the common shares of A&W Food Services NewCo will commence trading on the TSX under the ticker symbol “AW” on October 18, 2024.
Registered unitholders of the Fund are required to complete and return the letter of transmittal and election form to Computershare Investor Services Inc. to receive consideration for their units and a distribution of $0.10520 per unit. Non-registered unitholders will receive the consideration directly in their brokerage accounts.
A&W Food: A Legacy of Canadian Food Service Excellence
A&W Revenue Royalties Income Fund was established to invest in A&W Trade Marks Inc., which owns the A&W trademarks used in the Canadian QSR business. In return for licensing A&W Food Services NewCo to use its trademarks, Trade Marks is entitled to royalties equal to 3% of the gross sales reported by A&W restaurants in the Royalty Pool. This arrangement highlights the enduring value of the A&W brand in the Canadian market.
A&W Food Services NewCo stands as a leading QSR and the second-largest burger chain in Canada, boasting a 68-year history of service excellence, menu innovation, and value creation. Operating from coast to coast and serving over 197 million guests annually, A&W restaurants are known for their trademarked menu items such as The Burger Family®, Chubby Chicken®, and A&W Root Beer®.
Growth and Value Creation: The Future of A&W Food Services
The strategic combination of the Fund and A&W Food Services is expected to unlock significant growth opportunities for the company. A&W Food Services NewCo’s conventional capital structure provides increased financial flexibility to fund expansion initiatives and enhance shareholder value. The company’s experienced leadership team will continue to guide its strategic direction and drive its success in the competitive QSR landscape.
The focus on menu innovation, customer experience, and operational efficiency will be crucial factors in A&W Food Services NewCo’s ability to capture market share and maintain its position as a leading QSR chain in Canada. As A&W Food Services NewCo embarks on this new chapter, the company remains committed to delivering exceptional food and service to its loyal customers across the country.
