The M&M–Parkland deal

Behind the M&M –Parkland deal

How the $322-million deal came about and what’s next for

the food brand By Chris Powell

Why does this acquisition make sense for Parkland?

White: We already had a successful partnership with M&M through the Express program [Parkland’s On the Run banner currently hosts more than 100 M&M Express locations]; we had seen the customer reaction to that and we’ve seen our productivity improve at the 100-plus sites we’ve got today. We’d seen an improvement in average basket size, and we really liked the brand and what we saw from Andy and the team.

Andy O’Brien CEO of M&M Food Market

Ian White Senior VP of strategic marketing & innovation at Parkland CALGARY-BASED gas station and convenience store operator Parkland Corporation is significantly beefing up the food side of its business, with a $322-million deal for M&M Food Market.

The deal marks the beginning of a “bold new chapter” for M&M, says president Andy O’Brien. It follows a successful rebranding and transformation of the company’s 300 stores, 2,000 M&M Express locations and nearly 500 specialty products under current owner, Searchlight Capital Partners.

Canadian Grocer spoke with O’Brien and Ian White, Parkland’s senior vice-president of strategic marketing and innovation, about how the deal came about, why it makes strategic sense, and what’s next for the new partners (the interview has been edited for length and clarity).

Why and how did this deal come together?

o’BRien: We’d gotten to about seven years with our current capital partners Searchlight, who’ve been amazing partners all the way through. Part of my role is to let them know when I think it’s time for them to exit and monetize their investment.

At the same time, we had transformed every aspect of this business, and we’re poised for explosive growth. From my perspective, I really wanted a fresh partner that would see that and have a longer horizon than the current capital company, which tends to be five to eight years.

We started the process last January…and started talking to various companies in March, April and May; [we] got it down to 15 to 20 high-potential companies, and funnily enough, Parkland was not on that list.

Ian and I have a mutual colleague who suggested we talk about working closer together. When Ian shared his vision for where Parkland was going with food, I said ‘Wow, that’s pretty exciting. Would you guys ever actually consider acquiring M&M?’

I don’t think Ian knew we were on the market, because our investment bankers had not contacted their people. I told Ian ‘We’re six months into this process and it’s coming to an end, can you guys move fast?’

Everybody knows Parkland’s very good at acquisitions, and they went very quickly. As we went through the fall, I got to learn a lot more about Parkland and their intentions, and they learned about M&M, and it just made so much sense for both companies to come together.

How well suited do you think this brand is to travel?

White: Well it’s frozen, so it can travel a long way! All kidding aside, I think irrespective of the geography, we want to create convenience destinations, [and] we want to create stronger connections to consumers. We are going to focus on...Canada to get it right, so that when we’re ready to move into new geographies for the M&M brand, we’ve had a chance to test some concepts to ensure we’re successful.

Is there a timetable for an international move?

White: I think there’s a significant opportunity in Canada, so I’d say we’re 18 to 24 months away. o’BRien: I think that’s probably the right timeframe. We have significant opportunities to grow in Canada with our existing stores, with new stores, and new [markets], which is definitely our primary focus.

With that said, we conducted some massive research of our brand and concept in the U.S., to see whether there was space for M&M in that marketplace, and the results were outstanding. Now it’s a matter of [determining] what is the right time to go in there, and sequencing those events to make sure we don’t take our eye off the ball here in Canada.

M&M had undergone an extensive transformation process prior to this. Is that why you felt the time was right for this deal?

o’BRien: Yes and no. When [Searchlight] acquired the company back in 2014, we knew we had to transform every aspect of this business and that’s what we did—from remodelling the stores to evolving the product portfolio, to launching new loyalty programs. [It got] to the point where, in 2020, it was a completely different brand: Way better, way more relevant, and every year we were growing and thriving.

The reason I thought it was the right time to put it on the market was because we’re now in a position where I believe we are poised for significant growth— in Canada and internationally. There is no brand like M&M in North America; no other CPG company has a brand with over 450 branded products in 10 different categories. It’s a very unique brand. We have a great brand that we’re ready to grow significantly, and I was looking for a partner that saw the same thing.