Jollibee Foods Corp., the biggest fastfood chain in the Philippines, has completed the acquisition of a 40 percent interest in US-based burger chain Smashburger for $99.47 million.
Jollibee said in a disclosure to the stock exchange it funded the purchase through cash reserves and a 10-year loan from Metropolitan Bank & Trust Co.
Jollibee, through wholly-owned unit Bee Good! Inc., acquired 40 percent of Smashburger from Smashburger Master LLC.
Jollibee has an option purchase up to an additional 35 percent of Smashburger between 2018 and 2021 and the balance of 25 percent between 2019 at the earliest and 2026 at the latest.
The purchase price for the 60 percent balance will be based on the achievement of certain financial performance targets agreed between BGI and Master.
Jollibeer earlier said the acquisition would make US one of its growth drivers of long term growth, along the with Philippines, China and Filipino markets abroad.
Smashburger, with headquarters in Denver, Colorado, has 339 restaurants (184 company-owned and 115 franchised) worldwide in 35 states in the United States and seven foreign markets.
It is a leading fast casual better burger restaurant known for its fresh, never frozen, 100 percent certified Angus Beef burgers that are smashed on the grill to sear the juices, creating an upscale quality burger packed with flavor.
Smashburger’s systemwide sales have been growing at an annual rate of approximately 30 percent between 2001 and 2015, while its network has been increasing annually by approximately 20 percent. It estimates systemwide sales to reach $339 million this year.
Jollibee tapped JP Morgan as financial advisor and Pillsbury Winthrop Shaw Pittman LLP as legal consultant in the transaction. It also hired Isla Lipana & Co/PwC as accounting and tax advisor.
Smashburger, meanwhile, hired North Point Advisor as financial advisor and Pail, Weiss, Rifkinf, Wharton & Garrison as legal consultant.
Jollibee currently owns and operates 87 restaurants in the US, serving Filipino customers, consisting of Jollibee Red Ribbon, Chowking and Jinja outlets.
Systemwide sales in the US account for five percent of Jollibee’s worldwide system wide sales. Jollibee has 2,384 units and 629 outlets overseas.
It has 50 percent interest in joint ventures Highlands Coffee (Vietnam, Philippines), Pho24 (Vietnam, Indonesia, Cambodia and Korea) and 12 Sabu (China).