Fastfood giant Jollibee Foods Corp. said it completed the purchase of an additional 45 percent stake in US hamburger chain Smashburger.
Jollibee said a disclosure to the stock exchange Tuesday it secured the closing conditions, including required government approvals, under the purchase agreement signed by wholly-owned unit Bee Good! Inc. with Smashburger Master LLC.
With the acquisition, Jollibee now owns an 85-percent stake in the US hamburger chain, while Smashburger Master will retain the balance.
Jollibee said it would start consolidating Smashburger into its financial statement starting April 17.
Jollibee also disclosed that BGI refinanced Smashburger’s $80-million loan obligation by using a long-term loan obtained by the parent firm.
“A much lower cost long term financial mode possibly by JFC’s strong balance sheet will significantly improve the net income of Smashburger immediately,” Jollibee chief finance officer Ysmael Baysa said.
“It will also enable Smashburger to make more meaningful investments for healthier and faster growth. Smashburger has positive EBITDA. We look forward to the business making positive net income contribution to JFC’s profit in the medium term and significant contribution in the long term,” Baysa added.
Jollibee earlier said the acquisition of an additional 45-percent share in Smashburger worth $100 million would enable the fastfood chain to expand its geographical presence from 16 countries to 21, adding Costa Rica, Egypt, El Salvador, United Kingdom (England and Scotland), and Panama.
It will also add 365 stores to the Jollibee store network and increase sales from the foreign business to total systemwide sales to 30 percent from 20 percent.
Jollibee reported a 15-percent jump in net income in 2017 to P7.1 billion from P6.45 billion in 2016 on higher revenues and aggressive rollout of stores
System wide sales rose 15 percent to P171.7 billion from a year ago level of P149.1 billion, as sales of restaurant chains in the Philippines increased 13 percent while those abroad climbed 23 percent.