Jollibee’s Tony Tancaktiong boosts stake in Smashburger to 85%
Homegrown fast food giant Jollibee Foods Corp. (JFC) on Tuesday announced a deal to pay USD100 million to acquire an additional 45-percent stake in the American burger chain.
In a disclosure to the Philippine Stock Exchange (PSE), JFC said through its wholly-owned subsidiary, Bee Good! Inc. (BGI), the company will purchase from Smashburger Master LLC (Master) an additional 45 percent of SJBF LLC, the parent company of the entities comprising the Smashburger® business.
This will increase BGI’s ownership in SJBF LLC from current 40 percent to 85 percent. Master will retain the balance 15-percent ownership.
JFC said the transaction is expected to be completed in one to two months, subject to government approvals in the United States and meeting certain closing conditions.
The company will pay Master through BGI in cash.
“With this acquisition of more shares, JFC will have a more significant business in the United States. The US will increase its contribution to our worldwide system wide sales from 5 percent to 15 percent. We will be able to participate in the very large mainstream American consumer market in addition to serving Filipino-Americans there,” said JFC Chairman Tony Tan Caktiong.
Tan Caktiong expects the proportion of the company’s foreign business to worldwide system wide sales will increase from present 20 percent to 30 percent.
“We will eventually achieve our goal of 50/50 revenue split between the Philippines and foreign businesses even as our Philippine business continues to expand strongly since our foreign business is growing even faster. It will only be a matter of time,” he said.
JFC Chief Executive Officer, Emesto Tanmantiong, said “the consolidation of Smashburger into JFC will increase JFC’s store network in the US by 5-fold, from 83 to 417 and will expand its presence to 39 states in the US from current 10 states. It will also increase JFC’s store network in Canada, from two to eight.”
Based on the financial data, Smashburger has annual system wide sales of $333 million and net revenues of $200 million. (PNA)