Happy Belly Food Group Closes Acquisition of SALUS Fresh Foods QSR Restaurant Chain

Rhea-AI Summary

Happy Belly Food Group (OTCQB: HBFGF) has completed the acquisition of a 50% stake in SALUS Fresh Foods restaurant chain, marking its tenth restaurant brand acquisition. The transaction, valued at $300,000, was executed through the issuance of 272,479 common shares at $1.101 per share, representing approximately 2.4x normalized EBITDA.

SALUS operates as an asset-light, 100% franchised system with 9 locations in Ontario, offering fresh bowls, sandwiches, wraps, soups, smoothies, and healthy treats. This strategic acquisition brings Happy Belly's total portfolio to 12 food brands with 73 restaurants, strengthening its position as Canada's leading consolidator of emerging food brands.

The deal includes an option for Happy Belly to acquire the remaining 50% ownership, and the integration is expected to create significant operational synergies in real-estate, franchising, accounting, purchasing, and marketing.

Positive

• Acquisition is debt-free and cashflow positive
• Purchase price of 2.4x normalized EBITDA indicates favorable valuation
• Asset-light business model with 100% franchised system
• Option to acquire remaining 50% ownership
• Operational synergies across multiple business functions
• Expands portfolio to 73 restaurants and 12 food brands

Negative

• Share dilution through issuance of 272,479 new common shares
• Limited to 50% ownership control initially
• Geographic concentration risk with all locations in Ontario

News Market Reaction – HBFGF

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In the Aug 21 session, HBFGF declined 4.59%, reflecting a moderate negative market reaction.

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Toronto, Ontario--(Newsfile Corp. - August 21, 2025) - Happy Belly Food Group Inc. (CSE: HBFG) (OTCQB: HBFGF) ("Happy Belly" or the "Company"), a leader in acquiring and scaling emerging food brands across Canada is pleased to announce that further to its news release on November 1^st, 2024 announcing the signing of a definitive agreement to acquire 50% of the SALUS ("Salus") Fresh Foods Restaurant Chain, all closing matters have been completed and the acquisition has closed. Salus serves fresh bowls, sandwiches, wraps, soups, smoothies and healthy treats the whole family can enjoy.

Happy Belly 1

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"Happy Belly entered the first half of 2025 with strong organic growth across its portfolio of emerging brands. Building on this momentum, the company is proud to announce inorganic growth with the accretive acquisition of Salus on a debt free and cashflow positive basis, taking our business to the next level as we begin consolidating sectors to create a high-performing portfolio of brands," said Sean Black, Chief Executive Officer of Happy Belly. "With this acquisition, Happy Belly adds its tenth (10^th) restaurant brand and twelfth (12^th) food brand overall, totalling 73 restaurants and advancing our mission to become Canada's leading consolidator of emerging food brands."

Salus Fresh Foods is an asset light 100% franchised system with nine (9) established street-front and food court real-estate locations in Ontario. "When looking for an acquisition we look for the 3 P's: People, Product and Process. With co-founders Adam and David Spagnuolo of SALUS Fresh Foods, we found exactly that."

Happy Belly 2

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The acquisition brings synergies that both brands can leverage, such as streamlined integration into our established frameworks for real-estate, franchising, accounting, purchasing, supplier contracts, rebate systems, shared resources, and marketing support. These efficiencies will drive productivity and optimize labor costs, allowing us to continue focusing on the development and growth of emerging brands in the food sector."

Happy Belly 3

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Acquisition Details
Happy Belly will issue 272,479 common shares in the capital stock of the Company at a price of $1.101 per share, equal in value to $300,000 (based on a 10-day VWAP) for 50% ownership of Salus Fresh Foods, representing an estimated purchase price of 2.4x normalized EBITDA. Happy Belly has also obtained the rights to acquire the remaining 50% of the business at its optionality.

"We are just getting started," said Sean Black.

Happy Belly 4

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About SALUS Fresh Foods
Fresh, Healthy, Made from Scratch, Delicious. Everyday our team is slicing, dicing, roasting, marinating, saucing, and having fun while ensuring that every meal is fresh, simple, and delicious. Salus locations are ideally selected in the heart of large urban areas fed by mass transit, with access to busy professionals, students, and families who are in need of a quick and healthy meal.

Franchising
For franchising inquiries please see www.happybellyfg.com/franchise-with-us/ or contact us at hello@happybellyfg.com.

About Happy Belly Food Group
Happy Belly Food Group Inc. (CSE: HBFG) (OTCQB: HBFGF) ("Happy Belly" or the "Company") is a leader in acquiring and scaling emerging food brands across Canada.

Happy Belly Food Group

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Sean Black
Co-founder, Chief Executive Officer

Shawn Moniz
Co-founder, Chief Operating Officer

FOR FURTHER INFORMATION, PLEASE VISIT:
www: www.happybellyfg.com or email hello@happybellyfg.com
If you wish to contact us please call: 1-877-589-8805

Neither the Canadian Securities Exchange nor its Regulation Services Provider (as that term is defined in the policies of the Canadian Securities Exchange) accepts responsibility for the adequacy or accuracy of this press release, which has been prepared by management.

Cautionary Note Regarding Forward-Looking Statements

All statements in this press release, other than statements of historical fact, are "forward-looking information" with respect to the Company within the meaning of applicable securities laws. Forward-Looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur and include the future performance of Happy Belly and her subsidiaries. Forward-Looking statements are based on the opinions and estimates at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements. There are uncertainties inherent in forward-looking information, including factors beyond the Company's control. There are no assurances that the business plans for Happy Belly described in this news release will come into effect on the terms or time frame described herein. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. For a description of the risks and uncertainties facing the Company and its business and affairs, readers should refer to the Company's Management's Discussion and Analysis and other disclosure filings with Canadian securities regulators, which are posted on www.sedarplus.ca.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/263315

FAQ

What is the acquisition price for SALUS Fresh Foods by Happy Belly (HBFGF)?

Happy Belly acquired 50% of SALUS Fresh Foods for $300,000, paid through 272,479 common shares at $1.101 per share, representing 2.4x normalized EBITDA.

How many locations does SALUS Fresh Foods currently operate?

SALUS Fresh Foods operates 9 locations in Ontario, including street-front and food court real-estate locations, all under a 100% franchised system.

What is Happy Belly's total brand portfolio after the SALUS acquisition?

Following the SALUS acquisition, Happy Belly now owns 10 restaurant brands and 12 food brands overall, totaling 73 restaurants.

What synergies will the SALUS acquisition bring to Happy Belly?

The acquisition brings synergies in real-estate, franchising, accounting, purchasing, supplier contracts, rebate systems, shared resources, and marketing support, aimed at driving productivity and optimizing costs.

Does Happy Belly have the option to acquire full ownership of SALUS?

Yes, Happy Belly has obtained the rights to acquire the remaining 50% of SALUS Fresh Foods at its optionality, though terms were not disclosed.