Parkland Corp. has entered into a definitive agreement to acquire M&M Food Markets, a frozen food retailer, for approximately $322 million.
The acquisition includes more than 300 standalone franchise and corporate-owned stores and more than 2,000 M&M Food Market Express locations in Canada offering nearly 500 specialty frozen products.
Parkland will bring scale and complementary leadership strength that will allow M&M Food Market to continue to grow in Canada while expanding into new international markets, including the United States. The M&M brand, leadership, franchise system and store network will remain in place.
The deal represents one of the steps Parkland is taking in its retail diversification strategy to expand its proprietary food offer, customer reach and innovation pipeline, the company said.
With a “food-first” culture, M&M creates food options that customers can consume fresh-from-frozen on site, on the go and prepared from frozen at home. Parkland will leverage these capabilities throughout its existing network and soon-to-be-launched standalone On the Run convenience stores, it said.
“This acquisition provides a platform to grow our food offer, expand our proprietary brands and advance our digital and loyalty strategy,” said Ian White, Parkland's senior vice president of strategic marketing and innovation.
“Consistent with our commitment to create convenience destinations, M&M's national store network and innovative approach to food preparation and menu development positions us to offer high-quality food that complements our growing quick-serve restaurant offerings.
We will grow these capabilities in all our operating regions and bolster our digital connection to customers by combining M&M and Journie rewards programs. We look forward to bringing On the Run and M&M together to help customers make the most of every stop.”
Andy O'Brien, CEO of M&M, said, “Parkland's On the Run brand is a convenience retail leader and we are excited to combine our two offerings. M&M and its franchise partners share Parkland's customer focus and passion for quality food.
The combination of our innovative food capabilities and Parkland's more than 3,000 retail locations in 25 countries creates an immediate runway of growth and expansion opportunities.”
The move advances Parkland’s enterprise food strategy by adding a proprietary brand, experienced team, franchisee network and a scalable fresh and fresh-from-frozen food growth platform across all of its markets.
“We will leverage M&M's expertise and track record of developing successful menus in its innovation kitchen to evaluate and develop additional fresh and quick-serve food choices across our network,” the company said.
It also enhances Parkland’s On the Run customer value proposition. “M&M will be integral to our growing On the Run network, bolstering our in-store, e-commerce and home delivery offers and supporting our standalone convenience concept,” the company said.
M&M is a “capital-light … well-established, highly efficient food preparation and distribution network, requiring limited capital investment to efficiently serve its retail locations.”
And the acquisition advances Parkland’s digital strategy by combining its Journie loyalty program with M&M's reward programs with approximately two million active members to create cross-promotional opportunities.
The transaction is subject customary closing conditions, including approval under the Competition Act of Canada. The companies expect to close the transaction in first-quarter 2022.
M&M Food Market Express locations consist of dedicated freezers inside other retailers, including Rexall, Beaudry-Cadrin and Home Hardware, and c-store retailers such as Circle K, Pioneer, Ultramar, Wilsons Gas Stops, Go Stores, Fas Gas, MacEwen, Aisle 24 and more.
Parkland’s On the Run chain already hosts 100 Express locations, and the company expects to expand coverage to all 400 of the company’s stores nationwide within the “next couple of years,” Parkland CEO Bob Espey told BNN Bloomberg.
Espey said Parkland will maintain those relationships, although he added that an advantage of buying M&M was so his company “can start to develop some of our own proprietary offers that would only be available at our sites.”
Calgary-based Parkland is a consolidator and operator of convenience retail and fuel marketing businesses in Canada, the United States, the Caribbean and the Americas through retail, commercial and wholesale channels. It is the second largest c-store operator in Canada with 650 retail outlets and more than 1,830 dealer sites.
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