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Jollibee closes CBTL deal

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REUTERS

HOMEGROWN food giant Jollibee Foods Corp. (JFC) has completed its $350-million acquisition of The Coffee Bean & Tea Leaf (CBTL), about two months after the deal was announced.

In a disclosure to the stock exchange Tuesday, JFC said it has completed all the necessary closing conditions for the deal, including the required government approvals stated in the purchase agreement.

The listed firm bought CBTL on a debt-free basis, which means that the latter will have no debt upon acquisition. JFC used its Java Ventures, LLC as the acquiring entity. This is a US-based unit of Singapore-based Super Magnificent Coffee Co. Pte. Ltd., which in turn is a subsidiary of Jollibee Worldwide Pte. Ltd. (JWPL).

JWPL has entered into bridge loans with several financial institutions to finance the acquisition.

CBTL marks JFC’s largest acquisition to date, with presence in 27 countries. The company ended Aug. 31 with 1,180 outlets, 336 of which are company-owned while 844 are franchised. It booked a net loss of $21.38 million in 2018, after revenues of $313 million.

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The company will add 14% to JFC’s global system wide sales and 26% to its total store network. It also increases the international business’ contribution to 36% of worldwide sales.

CBTL will also be JFC’s largest business after the Jollibee brand. Including Highlands Coffee, the coffee business will account for 14% of JFC’s worldwide system sales.

“Combined with Highlands Coffee…this acquisition will enable JFC to become an important player in the large, fast growing, and profitable coffee business,” the company said.

Meanwhile, JFC’s worldwide network reached 4,663 stores by end-August, 3,226 of which are in the Philippines. This is under multiple brands such as Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, and PHO24.

Shares in JFC slipped 0.09% or 20 centavos to close at P220 each at the stock exchange on Tuesday. — Arra B. Francia

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