MANILA — Homegrown fast food giant Jollibee Foods Corp. (JFC) has signed the agreement to acquire an additional 45-percent stake in the American burger chain for USD100 million.
JFC told the local bourse Thursday that its wholly-owned subsidiary, Bee Good! Inc. (BGI), executed the deal with Smashburger Master LLC for the purchase of more shares of SJBF LLC, the parent company of the entities comprising the Smashburger® business.
The company said the transaction, which would increase BGI’s ownership in SJBF LLC to 85 percent, is “expected to be completed in one to two months, subject to government approvals in the United States and meeting certain closing conditions”.
JFC will pay Master through BGI in cash.
The fast food giant aims to increase presence in the US through Smashburger, raising from 5 percent to 15 percent the sales share of the US to its worldwide system-wide sales.
The consolidation of Smashburger into JFC will also increase its worldwide store network by 365 stores to 4,162, with its expansion to five more countries — Costa Rica, Egypt, El Salvador, United Kingdom, and Panama.
With its acquisition of more shares in Smashburger, JFC is working to reduce the financing cost for its USD80-million loan which will mature this May 15, and enable the business to make more investments for long-term growth.
The company said it would borrow long-term loans that feature lenient terms from banks, or issue loan guarantees to banks on behalf of Smashburger.
“A much lower cost long-term financing, made possible by JFC’s strong balance sheet, will significantly improve the net income of Smashburger immediately. It will also enable Smashburger to make more meaningful investments for healthier and faster growth,” said JFC Chief Financial Officer YsmaeI Baysa.
The JFC Group’s worldwide store network reached 3,805 stores.
As of Jan. 31, it was operating 2,873 restaurant outlets in the Philippines, and 932 stores abroad. (Leslie Gatpolintan/PNA)
