Cara Operation Sells Cafeteria Business

Cara Operations Limited (Cara) announced on November 2, 2000, that it has entered into an agreement to sell substantially all of the contract food catering business operated by its wholly-owned subsidiary, Beaver Foods Limited, to Compass Group Canada (1999) Ltd. (Compass), a wholly-owned subsidiary of Granada Compass PLC. The deal, which is conditional on regulatory approvals, is valued at about $150 million, which includes $6 million in deferred payments to be made over five years.

The transaction involves the purchase of all of Cara’s cafeteria operations across Canada. This includes the catering services provided in more than 1,000 facilities in schools, colleges, universities, remote camps and business and industry locations, with approximately 8,000 staff and sales of about $300 million per year. As a result of this transaction, Compass will become the largest cafeteria operator in Canada, matching the market positions of its sister corporations in Britain and Australia.

Cara and Compass also entered into a strategic alliance pursuant to which Compass will have the opportunity to license from Cara certain proprietary brands and introduce them to Compass’ institutional food service locations in Canada. In addition, Compass agreed to a five-year distribution agreement with Cara’s wholly-owned distribution subsidiary, Summit Food Service Distributors Inc.

Compass Group Canada was represented by Gowling Lafleur Henderson LLP, with a team comprised of Stephen Clarke, Filomena Frisina and Brian Fisher (corporate), Sharon Bennett (tax), Martha Milczynski (pension and benefits), Bill Vanveen (competition), Ross Wells and Sean Raleigh (labour), Clara Kisko (employment) and Eric Gross (franchises/licenses).

Osler, Hoskin & Harcourt LLP acted for Cara Operations Ltd. with a team that included John F. Petch, Q.C., Robert Yalden, John Groenewegen and Michal Pomotov (corporate), Judith Harris (tax), Michelle Lally and Kevin Ackhurst (competition), Tony Devir (pension and benefits) and Damian Rigolo (employment).