Philippines’ Jollibee to buy U.S. chain Coffee Bean & Tea Leaf for $350 million
MANILA, NNA – The Philippines’ largest fast-food chain Jollibee Foods Corp. (JFC) will take over American chain Coffee Bean & Tea Leaf for $350 million in its largest multinational acquisition to date.
The company’s Singapore subsidiary, Jollibee Worldwide Pte Ltd. (JWPL), will take an 80 percent stake in a Singapore holding company for $100 million, which will then buy 100 percent of the Los Angeles-based specialty coffee and tea brand, JFC said in a public filing on Wednesday.
“The acquisition is expected to be completed no earlier than 60 days from execution of the purchase agreement, subject to government approvals in the United States and meeting certain closing conditions,” JFC said.
Jollibee’s Vietnam partners in the coffee and restaurant business will buy the remaining 20 percent of the holding company.
JFC said U.S.-based Java Ventures LLC, a wholly-owned subsidiary of Jollibee Singapore, will make the acquisition, which will eventually become a subsidiary of the Singapore holding company.
The Philippine firm will invest another $250 million in advances to the new holding company. It will finance the entire $350-million acquisition debt-free and using a bridge loan.
“The acquisition of the Coffee Bean & Tea Leaf brand will be JFC’s largest and most multinational so far with business presence in 27 countries,” Tony Tan Caktiong, JFC’s chairman, said in the disclosure statement.
He said the purchase will add 14 percent to JFC’s global sales and 26 percent to its total store network, helping to realize its vision to become one of the top 5 restaurant companies in the world in market capitalization.
JFC is the largest food service network in the Philippines, with 3,195 restaurants and its Jollibee brand in 1,163 stores nationwide. The company also has 1,418 stores overseas, in China, the United States, Canada, Saudi Arabia and Vietnam.
JFC took over the U.S. burger chain Smash Burger last year, it’s second biggest acquisition.
Jollibee also owns Highlands Coffee in Vietnam. Caktiong said the Highlands brand combined with the latest acquisition will help JFC become an important player in the coffee industry. He said Coffee Bean and Tea Leaf will be its second largest business after its fast-food chain, with coffee accounting for 14 percent of worldwide sales.
“Our priority is to accelerate the growth of the Coffee Bean and Tea Leaf brand, particularly in Asia, by strengthening its brand development, marketing and franchise support system,” Caktiong said.
The Coffee Bean and Tea Leaf chain is currently owned by International Coffee & Tea, LLC. It has 1,189 outlets across the United States, Southeast Asia and the Middle East. Total revenue in 2018 was $313 million, with debt at $83 million.