Acquisition of Pizza 73

On June 14, 2007, Pizza Pizza announced it entered into a definitive agreement to acquire Flying Pizza 73 Inc. and its affiliated companies (together, “Pizza 73”). In connection with this transaction, the Fund has entered into a definitive agreement to acquire the trademarks and other intellectual property associated with Pizza 73 restaurant operations.

The Fund and Pizza Pizza are acquiring Pizza 73 for a combined purchase price of $70.25 million. The Fund, through the Partnership, will acquire the trademarks and other intellectual property of Pizza 73 for $54.04 million and Pizza Pizza will acquire the operating business of Pizza 73 for $16.21 million. An additional $3 million earnout will be paid to the Pizza 73 vendors by Pizza Pizza in July 2008, provided certain revenue and profitability targets are met. Pizza Pizza will license the trademarks and other intellectual property associated with Pizza 73 from the Fund for a 9% royalty payment to the Fund on system sales generated by the Pizza 73 restaurants in the royalty pool. The Transaction is expected to be immediately accretive to the Fund´s distributable cash per unit.

This transaction was approved at a special meeting of unitholders on July 20, 2007 by a majority of minority unitholders, and closed on July 24, 2007.


Founded in 1985, Pizza 73, with its recognizable phone numbers ending in “7373”, currently has 101 restaurants in its system. Pizza 73 operates in the take-out and delivery pizza QSR segment, principally in the province of Alberta. Pizza 73 currently has four locations outside of Alberta; three in Saskatchewan and two in British Columbia. Systems sales through its centralized call centre and together accounted for approximately 95% of Pizza 73´s sales.

Pizza 73 restaurants are not franchised, but instead are owned and operated as independent businesses. Each restaurant is a corporation equally owned by an independent owner/operator and Pizza 73. Pizza 73 supports its independent owner/operators with new restaurant openings, product development and supplier arrangements and a centralized marketing program funded by contributions from each restaurant equal to approximately 8% of annual sales. Trademarks and other intellectual property used in the restaurant system are owned by the Partnership. The Pizza 73 business also includes two commissaries and a call centre.