Move over Tim Hortons, Montreal's "King of the Food Court" Stanley Ma is swallowing Ontario's second largest coffee and doughnut chain.
Through a subsidiary of his company, MTY Food Group Inc., Ma is buying Country Style Food Services Inc., owners of 490 Country Style and Buns Master locations.
The move fulfills the mainly Asian-style fast-food operator's goal of entering the coffee market, pitting it against far larger rivals Tim Hortons and Starbucks.
Before the purchase, which closes May 1, MTY owned 24 fast-food chains, including Tiki-Ming, Sushi Shop and Sukiyaki.
Buying Country Style dramatically boosts the number of locations MTY owns to nearly 1,500, up from 1,000.
It also gives the company a far bigger presence in Ontario, where it also owns Yogen Fruz and Cultures.
The purchase price will be disclosed when the deal closes May 1, a spokesperson for MTY said. MTY is expected to pay cash, the spokesperson added.
MTY has no immediate plans to change Country Style, said Rick Martens, who is staying on as president and chief financial officer of the coffee and doughnut chain.
"My role will remain the same," Martens said. "There are no plans to change anything."
In its previous acquisitions, Martens said, MTY has kept the management and infrastructure in place and operated the new chains as independent brands.
The seller is CAI Capital Partners, a Montreal-based private equity firm, Martens said.
Martens, who joined Country Style as it was emerging from bankruptcy protection seven years ago, has been making over the brand.
A new "bistro deli" look, new menu, and new prices all aim to capture more women and more health-conscious consumers by emphasizing bagels, soups and salads over the more traditional doughnut fare. But competition between coffee chains is bound to intensify as consumers look for ways to scale back spending.
While Country Style appears to be trying to emulate Tim Hortons in look and feel, Tim's remains the far larger player with more than 3,000 outlets across Canada and the U.S.
Still, Country Style will boost MTY's buying power with suppliers and also bring cross-promotion opportunities between its brands.
That could mean selling Country Style coffee through other MTY-owned brands, or moving some mall-based MTY outlets into Country's Style standalone stores, much as Tim Hortons teamed up with Wendy's.
Ma founded MTY 25 years ago with one restaurant he financed himself. An immigrant from Hong Kong, he came to Canada with his family in his teens. The company has grown both through acquisitions and by developing its own brands.
It went public in 1996. Yesterday on the Toronto Stock Exchange, MTY shares closed down 10 cents at $7.40, down from its 52-week high last May of $10.01, but above November's low of $6.02.