JOLLIBEE Foods Corp. (JFC), one of the world’s leading quick service food chains, is set to list its coffee shop brand in Vietnam as a part its strategy to expand its footprint in fast-growing markets abroad.
Jollibee said in a disclosure that through its subsidiary JSF Investments Pte. Ltd. (JSF), it signed an agreement with its Vietnamese partner Viet Thai International Joint Stock Company (VTI) to publicly list their joint-venture firm Superfoods Group on the Vietnam Stock Exchange (VSE) by 2019.
Under the deal, Superfoods Group will conduct an initial public offering (IPO) prior to listing on the VSE on or before July 2019.
Superfoods Group is the owner and operator of the Highlands Coffee and Pho 24 brands and is a franchisee of Hard Rock Café. It currently operates 159 Highlands Coffee outlets, 33 Pho 24 stores, and three outlets of Hard Rock Café.
Superfoods has annual sales of $55 million and is one of the fastest growing joint venture businesses of JFC. Its revenues grew 36 percent in the first nine months of 2016 from a year ago, driven by Highlands Coffee expanding by 78 percent.
“We are very excited about our planned IPO of Superfoods. Our fastest growing business in terms of country is Vietnam and this reflects the vibrancy and potential of the economy and the strong performance of our joint venture business,” JFC chairman Tony Tan Caktiong said on Monday.
“I am confident that with the strong capability of our partner and the support of our organization in the Philippines, we will have a truly significant business in Vietnam,” he said.
Thai Phi Diep, chief executive officer of Superfoods Group and founder of Highlands Coffee, said: “We look forward to making Highlands Coffee and Pho 24 true national champion brands of Vietnam. Our planned IPO will raise capital to enable us to expand these two brands broadly in Vietnam, in other parts of Asia and in other key cities in the world. Our joint effort with the people of Jollibee Foods Corp. will make this possible.”
As part of the agreement, 60 percent of Superfoods Group will be owned by JFC through JSF, while VTI will have 40 percent stake.
JFC said the number of shares to be sold at the time of the IPO and the price per share will be determined by that time, based on the capitalization required to significantly grow the business and the fair value of the business.
In addition, JFC will include Superfoods Group in its financial consolidation, while its unit JSF will also provide a $30-million loan to its partner VTI.
Highlands Coffee is a coffee shop brand that serves Vietnamese coffee and light meals. It also sells packaged coffee through retail outlets. Pho 24 serves traditional Vietnamese dishes with rice noodles as its core products.
JFC also has a 48 percent interest in joint ventures for 12 Hotpot (China) 16, and a 40 percent interest in Smashburger that has 378 outlets, mostly in the United States. These joint ventures, together with the Superfoods Group’s 200 stores, total to 594 stores worldwide, which are currently not included in JFC’s consolidated store count.
To date, JFC has 3,236 stores, of which 2,565 outlets are in the Philippines and 671 are abroad.
The group’s brand network is composed of Jollibee, Chowking, Greenwich, Red Ribbon, Mang Inasal, and Burger King in the Philippines and in other parts of the world; as well as Yonghe King, Hong Zhuang Yuan, San Ping Wan, and Dunkin Donuts in China; as well as Jinja Bar in the US.
JFC has set a capital expenditure of P10.4 billion this year to fund new stores and renovations of existing stores.
At present, JFC is the largest in Asia and 10th largest QSR in the world in terms of market capitalization, according to Bloomberg data earlier cited by the company.
JFC chief financial officer Ysmael V. Baysa earlier said the company’s target to land in the world’s Top 5 QSRs is likely doable in seven years due to continued organic growth of new and existing stores as well as acquisition of new businesses abroad.