Jollibee Foods Corporation (JFC) has recently acquired 40% stake of U.S.-based burger chain Smashburger.
In a disclosure to the local bourse on Tuesday, JFC, through its company-owned subsidiary, Bee Good! Inc. (BGI) bought nearly $99 million of Smashburger Master LLC, the largest investment to date for JFC.
Smashburger is an American burger restaurant brand, best known for its 100% quality Angus beef grilled patties served at great value. The company is based in Denver, Colorado and currently has 335 branches worldwide, with estimated sales worth $339M at a 20% annual growth rate.
JFC chairman Tony Tan Caktiong said to the stock exchange that JFC has been looking into the U.S. for the brand’s significant growth overseas.
“This acquisition will make JFC’s presence in the US, more significant, going beyond the Filipino market and service mainstream consumers in the $100 billion US burger market, a food segment which is estimated to be almost three times larger than the pizza sandwich or coffee segment in terms of sales,” he said.
He also said that the agreement is comprehensive and open to more than just equity shares, with the purchase of Smashburger can go up to 35% between 2018 and 2021 as well as the balance of 25% between 2019 and 2026.
“This acquisition will make the U.S. one of JFC’s most important markets and drivers of long term growth along with the Philippines, China and the Filipino markets abroad,” he added.
The transaction is expected to be completed by the end of the year.
Meanwhile, Master said on Monday that the deal with BGI will also give way to the burger brand’s global expansion. In 2016, Smashburger is expected to open 80 more stores, with ten of them outside the U.S.
JFC currently has over 3,000 restaurants worldwide, about 2,384 outlets locally, and 87 in the U.S. including which includes Jollibee, Chowking, Red Ribbon, and Jinja Bar branches – accounting up to 5% of the company’s global sales.
It also has 50% shares in the Super Foods Group, which franchises restaurants Pho 24 and Highlands Coffee in Vietnam.
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