MANILA: Jollibee Foods Corp, the Philippines’ largest restaurant operator, will acquire a 70% stake in South Korea’s Compose Coffee in its latest move to grow its coffee and tea business.
The investment will serve as Jollibee’s “gateway in unlocking the fast-growing international value coffee market in South Korea, which ranks third globally in terms of coffee consumption per capita,” Jollibee said in a stock exchange filing.
Jollibee, known for its fried chicken, is seeking to boost growth by expanding its brand internationally, including in China, and by expanding its coffee and tea business.
It has controlling interests in The Coffee Bean and Tea Leaf and Vietnam’s Highlands Coffee.
Titan Dining II LP and Elevation Equity Partners Korea Limited will buy the remaining shareholdings of 5% and 25% in Compose Coffee, respectively.
Jollibee, which has a 90% interest in Titan, pegged the total consideration for the acquisition at US$340mil.
Compose Coffee, founded in Busan in 2014, will be Jollibee’s biggest brand in terms of number of stores, bringing its store network closer to 10,000, more than 66% of which will be outside the Philippines.
Jollibee estimates the purchase to add 2% to its revenues, 12% in pre-income tax earnings this year and 34% in store count.
Compose Coffee will be consolidated into Jollibee’s financial statements immediately upon completion of the acquisition.
The brand was named South Korea’s favourite coffee shop at the 2023 Korea’s Most Loved Brand Awards.
“We believe that Compose Coffee is a compelling strategic fit for JFC and is on track to becoming the largest, fastest growing and leading value coffee player in South Korea,” Jollibee chairman Tony Tan Caktiong said in a statement.
In March, Jollibee signed agreements to acquire a 10% stake in beverage maker in Botrista Inc, seeking to leverage its technological capabilities. — Bloomberg
