Homegrown fast-food giant Jollibee Food Corporation (JFC) on Tuesday said it has taken full control of the California-based The Coffee Bean & Tea Leaf (CBTL).
In a regulatory filing to the Philippine Stock Exchange (PSE), JFC, through its wholly-owned unit Jollibee Worldwide Pte. Ltd. (JWPL), said the completion of the $350 million or P18.3 billion acquisition came after the parties had accomplished the necessary closing conditions.
The conditions include the required government approvals under the purchase agreement.
“Consistent with the terms of the executed purchase agreement completed on 23 September (Los Angeles time) or 24 September (Manila time), JFC acquired CBTL on a debt-free basis,” the disclosure read.
Of the $350 million, $100 million represent 80 percent of the equity of the holding company while the $250 million balance served as advances to the new holding company.
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JPWL’s wholly-owned US subsidiary, Java Ventures, LLC, was the acquiring entity and will eventually become a wholly-owned unit of the soon to form holding company, according to JFC.
The payment for the acquisition of CBTL was funded by proceeds from bridge loans entered into by JWPL with several financial institutions.
As previously disclosed, the CBTL buyout is JFC’s largest and most multinational, with business presence in 27 countries.
The merger, according to JFC, is expected to add 14 percent to its global system-wide sales, 26 percent to its total store network and will bring international business’ contribution to 36 percent of worldwide sales.
With CBTL under its portfolio, JFC is a step closer to its vision to be one of the top restaurant companies in the world in terms of market capitalization.
Combined with Highlands Coffee, with business mostly in Vietnam, this acquisition will allow JFC to become “an important player in the large, fast-growing and profitable coffee business.”
CBTL was founded in 1963 and has expanded to 1,189 outlets as of end-2018, 284 of which are in the United States. With 139 outlets, the Philippines accounts for the largest chunk of CBTL’s 447 outlets in Southeast Asia.
Last year, its revenues reached $313 million.
JFC operates the largest food service network in the Philippines. As of end-August, it operates 3,226 restaurant outlets in the country. Its worldwide store network reached 4,663 stores.
