JFC completes deal to gain control of Smashburger
JOLLIBEE Foods Corp. (JFC) has completed its acquisition of an additional stake in American burger chain Smashburger, effectively expanding the homegrown fastfood giant’s global footprint.
In a disclosure to the stock exchange on Tuesday, the listed company said it has completed all closing conditions and regulatory approvals for the acquisition of an additional 45% stake in SJBF LLC, the parent firm of the entities related to the Smashburger business.
The transaction was made through a purchase agreement between JFC’s wholly owned unit, Bee Good! Inc. (BGI) and Smashburger Master LLC. This brings JFC’s total stake in Smashburger to 85%, as it has previously acquired a 40% share in the latter in 2015.
“With the completion of the acquisition, JFC shall include Smashburger in its financial consolidation starting April 17, 2018,” the company said.
The acquisition is valued at $100 million, to be paid in cash at the close of the deal.
The Denver-based burger chain currently operates through 365 restaurants worldwide, and is present in 39 states in the United States and in 10 foreign markets. This brings JFC’s global store network to 4,162, as well as expand its presence to 21 countries, adding Costa Rica, Egypt, El Salvador, the United Kingdom, and Panama.
With the acquisition, JFC said Smashburger will increase the sales contribution of the United States to worldwide systemwide sales to 15% from the present 5%. The acquired firm will also raise the contribution of foreign businesses to worldwide systemwide sales to 30% from 20% currently.
In the Philippines, JFC had a total of 2,884 outlets as of the end of February, maintaining its position as the largest food service network in the country. Of these stores, 1,071 carry the Jollibee brand; 529 are Chowking; 495 are Mang Inasal; 425 are Red Ribbon; 271 are Greenwich; and 93 are Burger King.
JFC has more brands operating in China, Hong Kong, Singapore, and the Middle East, among others.
The Tony Tan Caktiong-led firm booked a 15% growth in its net income attributable to the parent in 2017 to P7.089 billion. Revenues meanwhile also gained 15.6% to P131.57 billion, boosted by the double-digit increase in system wide retail sales for during the year.
JFC is accelerating its spending this year, allotting P12 billion for capital expenditures to fast track its global expansion. The company earlier said that it looks to see equal contribution from local and international sales by 2022.
Shares in JFC lost 1.03% or P3 to settle at P288.60 by closing bell at the Philippine Stock Exchange on Tuesday. — Arra B. Francia