MANILA, Philippines — Jollibee Foods Corp. has formally signed an agreement to purchase an additional 45 percent of US-based Smashburger Master LLC.
The $100 million transaction effectively raised Bee Good! Inc.’s (BGI) ownership in Smashburger to 85 percent.
BGI is a wholly-owned subsidiary of JFC.
JFC expects to complete the transaction in two months, subject to government approvals in the US, it said in a disclosure to the stock exchange.
The acquisition of more shares in Smashburger will allow JFC to have a more significant business in the US.
Furthermore, it would increase the sales contribution from the US to 15 percent of JFC’s worldwide systemwide sales from five percent.
The consolidation of Smashburger into JFC will increase its worldwide store network by 365 stores to 4,162.
It will also expand JFC’s geographical presence from 16 countries to 21 adding Costa Rica, Egypt, El Salvador, United Kingdom (England and Scotland), and Panama.
Once the acquisition is finalized, JFC will change Smashburger’s debt structure to significantly reduce its financing cost for its $80 million loan and enable the business to make more investments for long term growth.
JFC also disclosed that it has committed to provide financing to Smashburger in order to pay $80 million worth of loan obligations, which will mature on May 15.