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Jolibee’s Bee Good Inc. acquire majority stake in Smashburger

Denver-based fast-casual burger restaurant chain Smashburger now majority owned by Philippines’ Jollibee Foods Corp.

Edison Tongol

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Jollibee Foods Corp aquires controlling stakes at Smashburger

Manila, Philippines — Local fast-food retail giant company Jollibee Foods Corp. (JFC) has acquired a much bigger bite of the mainstream United States’ hamburger market with a whopping $100-million deal to boost its stake in Smashburger to a controlling interest of 85 percent.

Through its wholly owned subsidiary Bee Good! Inc., Jollibee currently owns 40 percent of the Denver-based fast-casual burger restaurant chain, with operate more than 370 corporate and franchise outlets operating in 37 states and 9 countries.

Jollibee has exercised its long-planned option to purchase an additional 45-percent stake in Smashburger in a transaction that is anticipated to be completed within a month or two.

Once approved, the acquisition of the additional stake in Smashburger would allow JFC to expand its worldwide store network by 9.6 percent to a total of 4,162 and boraden its footprint from 16 to 21 countries and territories. Smashburger also operates in Costa Rica, Egypt, El Salvador, United Kingdom (England and Scotland) and Panama.

Back in October 2015, Jollibee — through Bee Good! Inc. — initially acquired a 40 percent stake in Smashburger for $99 million.

“With the acquisition of more shares, JFC will have a more significant business in the United States. The US will increase its contribution to our worldwide sales from 5 percent to 15 percent,” Jollibee Foods Corporation’s chairman Tony Tan Caktiong stated in a disclosure to the Philippine Stock Exchange PSE).

This will boost JFC’s overseas operatin to 30 percent of worldwide sales from 20 percent.

Smashburger has annual sales of $333 million and net revenue of around $200 million, based on the annualized financial data of the last six months.

“We will eventually achieve our goal of 50/50 revenue split between the Philippines and foreign businesses even as our domestic business continues to expand strongly since our foreign business is growing even faster,” Caktiong added.

Just last year, the JFC opened a record 465 stores, ending the 2017 with 3,797 stores globally.

Jollibee has allocated P12 billion ($230 – $240 million) in capital spending budget for 2018, as it plans to build 328 new store location in the Philippines and 137 stores overseas. — CentrioNews.com

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