FILE PHOTO
Homegrown fast-food giant Jollibee Foods Corp. is taking a bigger bite of the American hamburger market by committing to hike its stake in Denver-based gourmet hamburger chain Smashburger to 85 percent from the existing 40 percent in the next few years.
In what is seen as a vote of confidence for the burgeoning US business, Jollibee announced Tuesday an amendment to its agreement with Smashburger Master LLC to purchase from the latter an additional 45-percent stake in SJBF LLC—the holding company for the Smashburger business—between 2018 and 2021.
They also agreed that Jollibee will acquire the balance of 15 percent by 2019 at the earliest and by 2026 at the latest, allowing the Filipino firm to gain full control of this US burger business.
This amended agreement is more aggressive than the original deal signed two years ago by Jollibee through wholly-owned unit Bee Good! Inc. to buy an additional 35 percent stake in Smashburger between 2018 and 2021 and to acquire the remaining 25 percent between 2019 and 2026.
Based on the old agreement, Jollibee would have been able to increase its interest to only 75 percent in the next two to four years. But while adopting the same timeframe, Jollibee will now be able to increase its interest to 85 percent.
The Denver-based hamburger chain currently has 374 restaurants, mostly in the United States.
When Jollibee bought into Smashburger in October 2015, the US restaurant chain was given an enterprise value of $335 million. —DORIS DUMLAO-ABADILLA