Homegrown fast-food giant Jollibee Foods Corp. has consummated a deal to acquire a controlling stake in US hamburger chain Smashburger, taking a bigger bite of the vast US market and scaling up its global footprint.
In a disclosure to the Philippine Stock Exchange on Tuesday, Jollibee said the closing conditions, including required government approvals, had been obtained as provided under the March 8 purchase agreement signed by wholly owned subsidiary Bee Good! Inc. (BGI) for the acquisition of an additional 45 percent of SJBF LLC, the parent company of the entities comprising the Smashburger business.
With the execution of the $100-million deal with Smashburger Master LLC, Jollibee now officially owns 85 percent of Smashburger through BGI, the disclosure said.
With the transaction, US sales contribution to worldwide sales surged to 15 percent from 5 percent. Consequently, foreign businesses now account for about 30 percent of Jollibee’s system-wide sales, from 20 percent prior to the Smashburger deal.
In terms of store network, the consolidation of Smashburger into Jollibee increases its worldwide store network by 365 stores or 9.6 percent to 4,162. This also expands Jollibee’s geographical presence from 16 countries to 21, adding Costa Rica, Egypt, El Salvador, United Kingdom (England and Scotland) and Panama to its global footprint.
Smashburger, which is based in Denver, Colorado, has 365 restaurants worldwide in 39 states in the US and in 10 foreign markets.
Jollibee—now one of the most valuable restaurant chains in the world in terms of market capitalization—had said that one of its priorities upon takeover would be to change Smashburger’s debt structure to significantly reduce its financing cost and enable the business to make more investments for long-term growth.