Philippine fast-food giant Jollibee Foods Corporation (JFC) has taken complete ownership of American hamburger chain Smashburger after acquiring the remaining 15 per cent stake that it did not own for $10 million.
In a disclosure to the Philippine Stock Exchange Friday, JFC said the acquisition of Smashburger Master LLC’s 15-per cent stake in SJBF LLC, the parent company of the entities comprising the Smashburger business, was carried out by its subsidiary, Bee Good! Inc.
Bee Good! Inc previously held 85-per cent stake in the burger chain after acquiring an additional 45-per cent stake for $100 million, paid in cash, last February.
Smashburger has 351 stores, mostly in the US, and has presence in Canada, Costa Rica, Egypt, El Salvador, Kuwait, Panama, Saudi Arabia, and the United Kingdom. It accounts for 7 per cent of JFC’s consolidated system-wide sales.
JFC, meanwhile, has 435 stores in North America, accounting for 12 per cent of the company’s worldwide system sales.
With the full ownership, JFC disclosed that it will inject more capital into the Smashburger business by converting $80 million loan held by Bee Good! on Smashburger into equity before the end of this year. The additional capital will support Smashburger’s growth in 2019 and in the years ahead, Jollibee said.
“We look forward to the development of Smashburger into a very strong brand and business in the United States,” JFC chairman Tony Tan Caktiong said.
He earlier said that the acquisition will enable JFC to participate in the very large mainstream American consumer market in addition to serving Filipino-Americans in the US. It will also allow the Philippine firm to achieve its goal of 50/50 revenue split between the Philippines and foreign businesses, Caktiong added.
The consolidation of Smashburger into JFC increases the Philippine-headquartered fast-food chain’s worldwide store network by 365 stores to a total of 4,162. This also expands JFC’s geographical presence from 16 countries to 21 adding Costa Rica, Egypt, El Salvador, United Kingdom (England and Scotland), and Panama.
Smashburger co-founder and CEO Thomas C. Ryan remains at the helm of Smashburger while being appointed as JFC’s Chief Product Development Advisor effective immediately.
Jose A. Minana, currently JFC country head for North America, will also assume additional responsibility as president of Smashburger. Among his tasks would be to introduce JFC’s business management systems into Smashburger and prepare it for a “strong sustained growth” in the US, JFC said.
JFC operates the largest food service network in the Philippines. As of December 31, 2017, the company was operating 2,875 restaurant outlets in the country. It operates 922 stores overseas.