Jollibee Foods Corporation (PSE:JFC) To Acquire 40 Percent of Smashburger Master for US$99 Million

PHILIPPINES – Jollibee Foods Corporation (PSE:JFC) is acquiring a 40-percent stake in US-based Smashburger Master LLC for approximately US$99 million.

In a disclosure to the Philippine Stock Exchange before the market opened on Tuesday, Jollibee Foods Corporation (PSE:JFC) said the acquisition will be carried out through its wholly-owned subsidiary Bee Good! Inc. (BGI).

BGI entered into an agreement with Smashburger Master, which owns, operates, and franchises “Smashburger”, a quick service restaurant chain based in the United States.

With headquarters in Denver, Colorado, there are 339 Smashburger restaurants worldwide in 35 states in the US and in 7 foreign markets.

In the disclosure, Jollibee Foods Corporation (PSE:JFC) said the acquisition will make JFC’s presence in the US more significant, going beyond the Filipino market and serving mainstream consumers in the USD 100 billion 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.

“This acquisition will make the US one of JFC’s most important markets and drivers of long term growth along with the Philippines, China and the Filipino markets abroad,” the company said in its disclosure.

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BGI’s purchase of 40 percent of SJBF is expected to be completed within 2015, subject to the fulfillment of certain conditions, including due performance by Master of its obligations under the agreement, continued accuracy of representations and warranties, and the procurement of consents from third parties relevant to the Smashburger business.

The purchase price shall be paid in cash at closing. At closing, BGI will acquire membership interests (“Units”) in SJBF representing 40 percent of the outstanding membership interests of SJBF for approximately US$99 million.

The purchase price for BGI’s 40% share in Smashburger is based on a US$335 million enterprise value and a US$248 million equity value.

Smashburger Chief Executive Scott Crane said that the agreement will help accelerate Smashburger’s international expansion, but that the initial focus is on continuing its domestic growth. Smashburger next year plans to open 80 restaurants, about 10 of them outside the US. – BusinessNewsAsia.com

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