Morgan’s Foods Inc., a Kentucky Fried Chicken franchisee with Akron-Canton area roots, said Monday it agreed to a $20 million takeover by Apex Restaurant Management Inc. of the San Francisco Bay Area of California.
Apex, one of the country’s largest operators of Long John Silver’s properties, will buy Morgan’s Foods, headquartered in Warrensville Heights, for $5 a share, in cash. As of December, Morgan’s said it had just over 4 million outstanding shares.
That amount represents “a premium” of 100 percent to Morgan’s Foods’ closing share price on Friday.
Shares of Morgan’s Foods, which trades as an over-the-counter stock, closed at $2.50 on Friday. On Monday, they closed up 94.8 percent to $4.87.
“This is an outstanding opportunity for Morgan’s shareholders, including many longstanding shareholders that have been continuous supporters of the company over the years,” Morgan’s Foods’ Chairman James C. Pappas said in the release issued Monday.
The deal is expected to close sometime this summer.
Morgan’s Food, whose headquarters moved from North Canton to the Cleveland area in the late 1980s, was initially founded as a food processing company in 1925. It entered the fast-food business in 1958, when it became one of the country’s first Kentucky Fried Chicken franchisees, opening a restaurant in Butler, Pa.
Today, Morgan’s Foods operates 68 KFC, Taco Bell and Pizza Hut Express franchises in Ohio, Pennsylvania, West Virginia, Illinois, New York and Missouri. In Northeast Ohio, Morgan’s Foods locations are in Alliance, Salem, Niles, Warren and Youngstown.
In 2013, Bandera Master Fund LP of New York made a $2 million plus equity investment in Morgan’s, becoming owner of 26 percent of the company’s stock.
Apex, with 3,200 employees and headquarters in Pleasanton, Calif., is a much younger and larger company. It was founded in 2005 by Tabbassum Mumtaz, Ajay Dhillon and Ray Wilia, who that year acquired 18 Long John Silver’s restaurants in Texas, Arkansas and Louisiana. Apex later bought more Long John Silver’s, as well as some A&W All American Food locations in the north Texas and Tulsa/Oklahoma City markets. In 2010, Apex acquired 54 KFC multi-brand restaurants in the metro Chicago market.
Mumtaz is president and CEO of Apex. He previously owned and operated several Wendy’s restaurant locations. He is managing partner of LJS Partners LLC, a venture that purchased the LJS brands from Yum! Brands Inc. in 2011. Yum! operates or licenses Taco Bell, KFC, Pizza Hut and WingStreet restaurants.
James J. Liguori is Morgan’s president, interim chief executive officer, chief operating officer and director.
Katie Byard can be reached at 330-996-3781 or firstname.lastname@example.org.