M&M Food Market to be Acquired by Parkland Corporation

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Parkland Corporation, a leading operator and consolidator of convenience retail and fuel marketing businesses, announced Tuesday it has entered into an agreement to acquire M&M Food Market, a premium, restaurant-quality frozen food retailer.

The acquisition includes over 300 well-located standalone franchise and corporate owned stores, over 2,000 M&M Express locations, and a well-established rewards program with approximately two million active members.

The deal is worth about $322 million, which will be funded out of existing credit facility capacity, said Parkland.

Ian White

“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 SVP Strategic Marketing & Innovation, in a statement. “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.”

White said the ON the RUN brand and its convenience store format is a critical component to the Parkland strategy.

Image: M&M Food Market

“We see M&M playing a significant role in bolstering our desire to become a convenience destination for our customers. M&M actually combines two great brands and teams with a proven track record of success and growth,” he said. 

“For Parkland, a big component of M&M is their food first culture and their ability to allow us the opportunity to support our convenience as a destination but do it through a quality food offer. It will be complementary to our branded food program as well.”

The existing M&M locations will continue as the company has a “terrific” franchise network and standalone business, added White.

“By combining the M&M business and the ON the RUN business, we’ve got a very strong value proposition,” he said, adding that bringing those together can form a new concept to meet the needs of the changing convenience consumer.

“The way to think about this is a scenario in the future . . . as people spend more time at convenience stores with a place they want to go versus have to go. What we want to be able to do is provide an environment where there’s a branded food offer, where there’s seating, where there’s opportunity for take home that M&M would provide in a welcoming and sort of enjoyable environment.”

ON THE RUN

Currently, M&M Express is in 140 Parkland locations. 

“We’ve committed to 50 ON the RUN standalone locations by 2025 and we think combining that standalone ON the RUN location with an M&M’s would be very beneficial,” explained White. “We see the ability for between 20 and 30 per cent growth over the next five years with the M&M brand and even more than that combined with ON the RUN.

“We think there’s hundreds we’ll call it of broader application to the M&M Express program and probably between 200 and 300 locations that are applicable for the ON the RUN network.”

White said the current M&M leadership will remain in place as it’s an important component of the transaction.

In Canada, Parkland has 1,994 retail company and dealer sites, 632 in the US and 655 internationally.

Parkland sees a long runway of growth opportunity with M&M. Currently, Parkland has about 350 ON the RUN flagship convenience stores and is on track to grow that to 1,000 over the next few years with M&M playing a key role and contributing to that growth and being part of these new stores with great opportunity in Parkland’s US and international business.

Andy O’Brien

“Parkland’s ON the RUN brand is a convenience retail leader and we are excited to combine our two offerings,” added Andy O’Brien, CEO of M&M, in a statement. “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.

“Today marks the start of a bold new chapter for our company and stands as a testament to the vision and tireless work of our dedicated team. After a comprehensive examination of our experience, our products, profitability, dedicated franchise partners, impressive store network, and our business strategy, Parkland concluded that M&M will be an essential part of achieving their long-term goals in the food industry.”

M&M Food Market was founded in 1980. It rebranded in 2016 including the name change from M&M Meat Shops, a new store design, new products and packaging, a new website, and newly trained Meal Advisors. It is headquartered in Mississauga with locations in all 10 provinces, Yukon, and the Northwest Territories.

Parkland is a leading convenience store operator and independent supplier and marketer of fuel and petroleum products. Parkland services customers across Canada, the United States, the Caribbean region and the Americas through three channels: Retail, Commercial and Wholesale. 

Photo: M&M Food Market
Photo: M&M Food Market

Parkland said the acquisition represents one of many steps it is taking in its retail diversification strategy to expand its proprietary food offer, customer reach and innovation pipeline.

“Led by an experienced management team who have a proven track record of growth and a food-first culture, M&M will create quality food options that our customers can consume fresh-from-frozen, both on site and on the go, and prepared from frozen at home. We will leverage these capabilities throughout our existing network and soon to be launched standalone ON the RUN convenience locations,” said the company.

Parkland said the acquisition enables key elements of its strategy:

  • Advances its 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 our 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.”;
  • Advances its digital strategy and creates a premier Canadian loyalty program by combining JOURNIE and M&M’s reward programs which has two million active members. It will create extensive cross-promotional opportunities and form one of Canada’s premier loyalty programs;
  • Enhances its ON the RUN customer value proposition and M&M Market is integral to it growing On the Run network, bolstering its in-store, e-commerce and home delivery offers, and supporting its standalone convenience concept;
  • M&M leverages a well-established, highly efficient food preparation and distribution network, requiring limited capital investment to efficiently serve its retail locations;
  • M&M’s royalty fee-based operating model creates a ratable stream of cash flow. Parkland aims to grow M&M’s Canadian annual run rate Adjusted EBITDA to approximately $55 million in three years.

Searchlight Capital Partners acquired M&M in 2014 and today it operates 315 franchised stores and over 2,000 M&M Express locations through innovative partnerships with top retailers including Rexall, Beaudry-Cadrin and Home Hardware.

“We are excited about the next chapter for M&M and applaud Parkland’s innovative integrated retail approach that is poised for strong expansion of the brand,” said Erol Uzumeri, Founding Partner of Searchlight Capital, in a statement. “We extend our warm appreciation and gratitude to M&M’s stellar management team, employees, and franchise partners as they have established M&M as a high-quality, trusted food brand for Canadians nationwide.”

The transaction is expected to close in the first quarter of 2022.

M&M Food Market was advised by RBC Capital Markets, CG Sawaya Partners, and Goodmans LLP.

Mario Toneguzzi
Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior News Editor with Retail Insider in addition to working as a freelance writer and consultant in communications and media relations/training. Mario was named as a RETHINK Retail Top Retail Expert in 2024.

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