Homegrown fast-food giant Jollibee Foods Corp. (JFC) has taken a bigger bite of the mainstream American hamburger market with a $100-million deal to jack up its stake in Smashburger chain to a controlling interest of 85 percent.
Through wholly owned subsidiary Bee Good! Inc., JFC currently owns 40 percent of Denver-based Smashburger, which operates 365 stores.
JFC has exercised its long-planned option to buy an additional 45-percent stake in Smashburger in a transaction that is expected to be consummated in a month or two.
This consolidation will expand Jollibee’s worldwide store network by 9.6 percent to 4,162 and widen its footprint from 16 to 21 countries. Smashburger also operates in Costa Rica, Egypt, El Salvador, United Kingdom (England and Scotland) and Panama.
“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,” JFC chair Tony Tan Caktiong said in a disclosure to the Philippine Stock Exchange.
This will boost JFC’s overseas business to 30 percent of global sales from 20 percent.
Smashburger has annual sales of $333 million and net revenue of about $200 million, based on the annualized financial data of the past 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,” the Jollibee founder added.