JOL­LIBEE TAKES CON­TROL OF US BURGER CHAIN

Philippine Daily Inquirer - - BUSINESS - By Doris Dum­lao-Abadilla @Philbizwatcher

Home­grown fast-food giant Jol­libee Foods Corp. has con­sum­mated a deal to ac­quire a con­trol­ling stake in US ham­burger chain Smashburger, tak­ing a big­ger bite of the vast US mar­ket and scal­ing up its global foot­print.

In a dis­clo­sure to the Philip­pine Stock Ex­change on Tues­day, Jol­libee said the clos­ing con­di­tions, in­clud­ing re­quired gov­ern­ment ap­provals, had been ob­tained as pro­vided un- der the March 8 pur­chase agree­ment signed by wholly owned sub­sidiary Bee Good! Inc. (BGI) for the ac­qui­si­tion of an ad­di­tional 45 per­cent of SJBF LLC, the par­ent com­pany of the en­ti­ties com­pris­ing the Smashburger busi­ness.

With the ex­e­cu­tion of the $100-mil­lion deal with Smashburger Mas­ter LLC, Jol­libee now of­fi­cially owns 85 per­cent of Smashburger through BGI, the dis­clo­sure said.

With the trans­ac­tion, US sales con­tri­bu­tion to world­wide sales surged to 15 per­cent from 5 per­cent. Con­se­quently, for­eign busi­nesses now ac­count for about 30 per­cent of Jol­libee’s sys­tem-wide sales, from 20 per­cent prior to the Smashburger deal.

In terms of store net­work, the con­sol­i­da­tion of Smashburger into Jol­libee in­creases its world­wide store net­work by 365 stores or 9.6 per­cent to 4,162. This also ex­pands Jol­libee’s geo­graph­i­cal pres­ence from 16 coun­tries to 21, adding Costa Rica, Egypt, El Sal­vador, United King­dom (Eng­land and Scot­land) and Panama to its global foot­print.

Smashburger, which is based in Den­ver, Colorado, has 365 restau­rants world­wide in 39 states in the US and in 10 for­eign mar­kets.

Jol­libee—now one of the most valu­able restau­rant chains in the world in terms of mar­ket cap­i­tal­iza­tion—had said that one of its pri­or­i­ties upon takeover would be to change Smashburger’s debt struc­ture to sig­nif­i­cantly re­duce its fi­nanc­ing cost and en­able the busi­ness to make more in­vest­ments for long-term growth.

Newspapers in English

Newspapers from Philippines

© PressReader. All rights reserved.