PHILIPPINE food service giant Jollibee Foods Corporation (JFC) is investing US$100 million in a new Singapore-based holding company to acquire coffee chain giant The Coffee Bean & Tea Leaf (CBTL).
The company announced on Wednesday, July 24, that it is set to acquire The Coffee Bean & Tea Leaf brand for $350 million. This will be JFC’s largest and most multinational so far with business presence in 27 countries. The $350 million is on a debt-free basis, which means the acquired business will have no debt upon acquisition.
JFC disclosed in a statement that through its Jollibee Worldwide Pte. Ltd. (JWPL, Singapore), it will be investing $100 million for a new Singapore-based holding company to acquire 100 percent of CBTL.
The CBTL brand will be acquired through Java Ventures, a wholly owned subsidiary of JWPL, from International Coffee & Tea, LLC, the Los Angeles-based owner and operator of CBTL. Java Ventures will eventually be a wholly owned subsidiary of the new Singapore-based holding company.
JFC’s acquisition of CBTL, which was approved by Jollibee’s board of directors on July 24, will add 14 percent to its global system wide sales, 26 percent to its total store network, and will bring international business’ contribution to 36 percent of worldwide sales.
The company said this will bring it “closer to its vision to be one of the top five restaurant companies in the world in terms of market capitalization.”
JFC’s acquisition of CBTL will enable it “to become an important player in the large, fast growing, and profitable coffee business.” Aside for CBTL, JFC also partly owns Highlands Coffee under Superfoods Group, which is a joint venture between JFC and Viet Thai International Joint Stock Company.
“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,” the company stated in its disclosure.