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By Likha C. Cuevas-Miel, Reporter
JOLLIBEE Foods Corp. (JFC) disclosed to the Philippine Stock
Exchange on Friday that it is poised to acquire its second
restaurant chain in China.
Hongzhuangyuan, a chain which
consists of 26 company-owned stores in Beijing and 7 franchised
store in other cities, has estimated sales of $24 million this year,
“quite profitable” and debt-free, the Philippines’ biggest
fast-food chain said in a statement.
Ysmael V. Baysa, JFC chief
finance officer, said the purchase price is estimated to reach $50.5
million and is based on a multiple of earnings that is “comparable
with JFC’s previous acquisitions.”
JFC has yet to acquire shares in
the company, as the transaction is still conditional but would
eventually buy the restaurant chain 100 percent in the coming
months. The acquisition would be paid in three tranches within a
12-month period after closing the deal through an existing fund, the
firm said.
By the time of the purchase, the
total number of stores would increase from 33 to 38, it added.
“We are encouraged by our
continued progress in our foreign businesses including Yonghe King
in China. Hong-zhuangyuan will be a strong addition to our presencea
in China in terms of market segment and geographical coverage,”
Tony Tan-Caktiong, JFC chairman and chief executive, said.
According to Tan-Caktiong, the
new acquisition serves a variety of local Chinese food centered
around congee with prices that provide “superior value” enough
to attract a high number of customers at different times of the day.
“We believe that this
restaurant chain has the potential for broad acceptance across
China,” he added.
In the past four years, the
fast-food firm has been aggressive in opening new stores and
acquiring new businesses that it can grow through franchises. It
earlier acquired Yonghe King also in China and Red Ribbon in the
Philippines. JFC also bought out the Delifrance franchise.
At end-June, JFC was operating
1,385 stores in the Philippines, 583 of which are Jollibee stores,
367 Chowking, 237 Greenwhich, 163 Red Ribbon, and 35 Delifrance. JFC
has 174 stores in China, the United States, Dubai, Indonesia and
other Asian countries.
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