Convenience retail and fuel marketing company Parkland Corp. announced it has entered into an agreement to acquire M&M Food Market, a restaurant-quality frozen food retailer that brings high-quality, convenient food choices to Canadians.

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

“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 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.”

White added that Parkland will grow those capabilities in all of its operating regions and bolster its digital connection to customers by combining M&M and the JOURNIE rewards programs. “We look forward to bringing ON the RUN and M&M together to help customers make the most of every stop,” he said.

The acquisition includes more than 300 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.

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 Parkland’s customers can consume fresh-from-frozen, both on site and on the go, and prepared from frozen at home. Parkland said it will leverage those capabilities throughout its existing network and soon-to-be launched standalone ON the RUN convenience locations.

“Parkland’s ON the RUN brand is a convenience retail leader and we are excited to combine our two offerings,” said Andy O’Brien, CEO of M&M. “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 acquisition enables key elements of Parkland’s strategy:

• Advances its enterprise food strategy: Adds a proprietary brand, experienced team, franchisee network, and a scalable fresh and fresh-from-frozen food growth platform across all markets. Parkland 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 its network.
• Advances digital strategy and creates a premier Canadian loyalty program: By combining JOURNIE and M&M’s reward programs, which has two million active members, Parkland will create extensive cross-promotional opportunities and form one of Canada’s premier loyalty programs.
• Enhances ON the RUN customer value proposition: M&M will be integral to growing On the Run network, bolstering in-store, e-commerce and home delivery offers, and supporting standalone convenience concept.
• Capital-light: M&M leverages a well-established, highly efficient food preparation and distribution network, requiring limited capital investment to efficiently serve its retail locations.
• Ratable cash flow with significant growth potential: 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.

The total consideration for the transaction is approximately $322 million, which will be funded out of existing credit facility capacity. The acquisition is expected to close in the first quarter of 2022.

M&M is headquartered in Mississauga, Ont., with locations in all 10 Canadian provinces, Yukon, and the Northwest Territories.