Selling Canadian coffee shop Second Cup Coffee Co. will give Aegis Brands Inc. a stronger balance sheet to pursue future M&A in the cannabis retail sector, the head of the company said.
Aegis said in a release on Monday that it will sell Second Cup to Quebec-based Foodtastic Inc. for $14 million, plus a post-closing earn-out. There are 231 Second Cup outlets in Canada, according to the company's most recent quarterly report, 31 of which are corporate-owned.
The sale will mark the end of Second Cup's four-decade-long run as one of Canada's biggest independent coffee shop franchises. Second Cup has seen its market share dwindle in recent years amid the emergence of stronger competitors like Starbucks Inc., McDonalds Corp, and Restaurant Brands International Inc.'s Tim Hortons.