By Arra B. Francia, Reporter
JOLLIBEE Foods Corp. (JFC) will be investing S$45 million, or around P1.74 billion, on the private equity fund that bought the master franchise for Tim Ho Wan in the Asia Pacific, giving the homegrown food giant access to acquire another brand.
In a disclosure to the stock exchange on Wednesday, JFC said its wholly owned subsidiary Jollibee Worldwide Pte. Ltd. will invest in Titan Dining LP (Titan), a private equity fund with a fund size of S$100 million.
Titan has signed a binding agreement with Tim Ho Wan Pte. Ltd. (THWPL), the holder of the exclusive long-term master franchise for the Tim Ho Wan brand in Asia Pacific, excluding Hong Kong, alongside affiliate Dim Sum Pte. Ltd. which owns and operates Tim Ho Wan stores in Singapore.
JFC’s investment comprises 45% of Titan’s total fund size, with the remaining percentage coming from other investors. A representative from JFC will sit on Titan’s investment committee.
“Titan may eventually add other brands in the food service sector to its portfolio, with the objective to grow strong Asia-Pacific food service brands across multiple geographies and markets, and to bring strong global food service brands to Asia Pacific,” according to JFC.
The purchase mechanism provided in the agreement with Titan states that the fund’s term will end in seven years, allowing JFC to acquire a substantial ownership in THWPL by the end of the period. JFC will be franchising the Tim Ho Wan brand in Shanghai, People’s Republic of China in preparation for this.
“This investment gives JFC the opportunity to have a significant interest in the Tim Ho Wan franchise in the long term and will bring very healthy financial returns to JFC,” JFC Founder and Chairman Tony Tan Caktiong said in a statement.
Established in Hong Kong in 2009, Tim Ho Wan is touted as a Michelin-star dim sum restaurant known for its affordable food choices. The brand will complement JFC’s three Chinese cuisine stores, namely Chowking, Yonghe King, and Hong Zhuang Yuan which together accounted for 23% of the company’s systemwide sales in 2017.
Chowking is currently JFC’s largest brand in terms of systemwide sales, given its 577 locations worldwide. Yonghe King is a Taiwanese-inspired restaurant chain in China with 310 stores, while Hong Zhuang Yuan is a full-service restaurant in Beijing.
JFC also reported on Wednesday that it generated P1.8 billion in attributable profit for the first quarter of 2018, jumping 17.3% from year-ago figures. Revenues also got an 18.8% boost to P34.8 billion, as systemwide retail sales surged 19.3% to P45.98 billion.
The company attributed the increase to the performance of the Philippine market, where system wide sales grew 16.5%. The foreign business, meanwhile, saw a 16.7% uptick in system wide sales, with China accelerating the fastest at 17.9%, followed by the Europe, Middle East, and Asia cluster (excluding SuperFoods), which gained 22.6%.
JFC ended the quarter with a total of 3,838 stores world wide across the Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, Yonghe King, Hong Zhuang Yuan, Dunkin’ Donuts, Highlands Coffee, Pho 24, and Hard Rock Cafe brands.
Meanwhile, the Smashburger group had 352 stores by the end of the quarter, which will be consolidated under the JFC group starting April.
Shares in JFC jumped 1.80% or P5 to close at P283 each on Wednesday.