VANCOUVER – Fairfax Financial Holdings (TSX:FFH) has signed a deal to buy a majority stake in the company that operates the Keg steakhouse chain restaurants.
Fairfax will buy 51 per cent of Keg Restaurants Ltd. from its president and CEO, David Aisenstat, who will own the remaining 49 per cent and continue to lead the team that operates the business.
Financial terms of Aisenstat’s deal with Fairfax weren’t disclosed.
Keg Restaurants Ltd. pays a royalty on sales to Keg Royalties Income Fund (TSX:KEG.UN) which holds trademarks and other intellectual property used by the restaurant chain.
The Keg has more than 100 restaurants employing about 9,500 people and about $500 million of annual sales.
It’s the latest restaurant deal for Fairfax, which is a Toronto-based investment company that’s been diversifying beyond is main focus in property and casualty insurance.
Fairfax recently agreed to sell its majority stake in Prime Restaurants to Cara Operations.
According to a Nov. 8 filing with Canadian regulators, Fairfax received $156.9 million worth of Cara preferred shares, subordinated debentures, and warrants in return for an undisclosed amount of cash and a 81.7 per cent interest in Prime Restaurants Inc.
Fairfax acquired its stake in Prime in January 2012 for $57.7 million after outbidding Cara, which had attempted to make a friendly takeover of its rival to form a larger restaurant company.
The Cara-Prime deal, expected to close in early 2014, will put East Side Mario’s, Casey’s and Bier Markt under the organization that owns Swiss Chalet, Milestones Grill & Bar, Montana’s Cookhouse, and Kelsey’s.
Fairfax’s deal with Cara was described by Cara as a strategic financing transaction, that will result in Bill Gregson becoming president and CEO of the combined Cara Operations.
Gregson was formerly the executive chairman of The Brick, a national furniture chain that received backing from Fairfax before the business was sold to rival Leon’s.
— by David Paddon in Toronto