Pizza Pizza Royalty Corp.

Pizza Pizza Royalty Corp.

March 23, 2015 08:59 ET

Pizza Pizza Royalty Corp. and Pizza Pizza Limited Announce Closing of Bought Deal

TORONTO, ONTARIO--(Marketwired - March 23, 2015) -

Attention Business Editors:

Pizza Pizza Royalty Corp. (the "Company") (TSX:PZA) announced today the completion of the previously announced secondary offering by Pizza Pizza Limited, the private operating company of the Pizza Pizza business (the "Selling Shareholder"). The Selling Shareholder entered into an agreement with a syndicate of underwriters led by TD Securities Inc., pursuant to which the underwriters purchased from the Selling Shareholder, on a bought deal basis, 2,800,000 common shares of the Company (the "Shares") at a price of $15 per Share (the "Issue Price") for gross proceeds of $42,000,000 (the "Offering"). The Selling Shareholder has also granted the underwriters an over-allotment option to purchase up to an additional 200,000 Shares at the Issue Price, exercisable in whole or in part at any time for a period of up to 30 days following closing of the Offering, to cover over-allotments.

Prior to the closing of the Offering, the Selling Shareholder held Class B and Class D partnership units of Pizza Pizza Royalty Limited Partnership which were exchangeable for 8,924,133 common shares of the Company. This holding represented 29% of the Company's fully diluted shares. At the closing, the Selling Shareholder exchanged only that number of Class B partnership units needed for the number of Shares to be sold pursuant to the Offering.

Following the closing of the Offering, the Selling Shareholder retains a beneficial ownership equivalent to 6,124,133 shares, representing 19.9% of the Company's fully diluted shares (19.3% ownership if the over-allotment option is exercised in full).

The Company will not receive any proceeds from the Offering. All proceeds will be payable to the Selling Shareholder.

The Offering results from internal financial planning by the Selling Shareholder and should not be viewed in any way as a reflection of its view of, or outlook for, the Company. Under the structure of the Company, the Selling Shareholder's entitlement to receive Class B and Class D partnership units is increased periodically to reflect the addition of new restaurants to the royalty pool.

This press release is not an offer of securities for sale in the United States. The Shares being offered have not been and will not be registered under the United States Securities Act of 1933 and accordingly are not being offered for sale and may not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to an exemption from the registration requirements of that Act.

Forward-Looking Statements

Certain statements in this report may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. When used in this report, such statements include such words as "may", "will", "expect", "believe", "plan", and other similar terminology. These statements reflect management's current expectations regarding future events and speak only as of the date of this report. These forward-looking statements involve a number of risks and uncertainties, including those described in the Company's annual information form. The Company assumes no obligation to update these forward looking statements, except as required by applicable securities laws.

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