HOMEGROWN fast food chain Jollibee Foods Corp. (JFC) is moving to acquire a bigger chunk of US-based burger chain Smashburger to build a stronger market presence in the US.
In a disclosure to the Philippine Stock Exchange on Tuesday, JFC said its wholly owned subsidiary Bee Good! Inc (BGI) and Smashburger Master LLC (Master) have revised the terms of their earlier agreement on JFC’s option to additional shares in the US burger chain.
Master is the parent firm of SJBF LLC, which is the operator and franchiser of Smashburger.
The revised agreement now allows BGI to acquire an additional 45 percent stake in the Smashburger operator from 2018 to 2021, and another option to buy 15 percent from 2019 to 2026.
The earlier deal had offered BGI the option to acquire only 35 percent of SJBF from 2018 to 2021, and 25 percent from 2019 to 2026.
Since the announcement of the joint venture agreement between BGI and Master in October 2015, JFC has acquired a 40 percent stake in the Smashburger chain valued at $100 million.
JFC funded the acquisition with cash reserves and 10-year loan from Metrobank.
Headquartered in Denver, Colorado, Smashburger is one of the fastest growing restaurant brands in the US with 339 outlets across 35 US states and seven foreign markets.
JFC said the Smashburger acquisition will make the group’s presence in the US more significant, going beyond the Filipino market and serving mainstream consumers in the $100-billion burger market, a food segment which is estimated to be almost three times larger than the pizza, sandwich or coffee segment in terms of sales.
As of end-2016, JFC had 3,254 stores worldwide, comprising 2,643 outlets in the Philippines and 611 stores abroad. Other than its flagship brand Jollibee and Smashburger in the US, its brand network also includes Chowking, Greenwich, Red Ribbon, Mang Inasal, and Burger King in the Philippines and abroad, as well as Yonghe King, Hong Zhuang Yuan, and Dunkin’ Donuts in China.