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Jollibee is taking bigger bite of Smashburger
Posted on Wednesday, 14 February 2018 09:05
Jollibee Foods has agreed to increase its stake in US-based burger chain Smashburger Master by around 45.0 per cent for roughly USD 100.00 million in cash.
The Philippines-based fast-food giant already controls 40.0 per cent of the business through its Bee Good! subsidiary, which acquired the holding for roughly USD 134.00 million in 2015.
At the time, Smashburger said the deal valued the entire company at around USD 335.00 million and allowed it to join Asia’s largest restaurant group.
The chain will continue to hold the remaining 15.0 per cent of its business, with Jollibee expected to control 85.0 per cent when the transaction is finalised in the next two months.
Once signed off, the purchase allows the buyer to increase its worldwide network by 365 stores to 4,162 locations, expanding its geographical presence to 21 countries such as Costa Rica, Egypt, El Salvador and the UK.
In a statement on the Philippine Stock Exchange, Jollibee chairman Tony Tan Caktiong, said: “The acquisition will increase contribution to our worldwide system-wide sales from 5.0 to 15.0 per cent.
“JFC [Jollibee Foods Corporation] will be able to participate in the very large mainstream American consumer market in addition to serving Filipino-Americans there.”
Completion is dependent on government approvals in the US and other closing conditions.
Smashburger opened in 2007 and is known for its “fresh never frozen” approach to its beef. In addition to burgers, the group also offers grilled and spicy chicken sandwiches, salads, as well as sides such as haystack onions and veggie frites and hand crafted Haagen-Dazs milkshakes.
Jollibee has a market value of about USD 5.70 billion, and operates over 2,700 restaurant outlets, including fast-food chains McDonald’s and KFC in the Philippines.
The company’s net income jumped 15.0 per cent to PHP 7.10 billion (USD 136.81 million) in 2017, on higher revenues, according to a report by Rappler.com, which also suggested the group has roughly PHP 12.00 billion in capital spending for 2018 and plans to open new stores with the funding.
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