SGX-listed Yoma Strategic Holdings has announced the acquisition of a 65 per cent stake in Yankin Kyay Oh Group of Companies (YKKO), one of Myanmar’s largest restaurant chains, for K19.4 billion ($12.6 million).
YKKO, which is popular for its ‘Kyay-Oh’ vermicelli and flat rice noodle-based dish, operates 37 outlets across the country.
The total consideration to be paid was arrived on a willing-buyer, willing-seller basis, taking into consideration the current and projected earnings of YKKO, among others. YKKO’s tangible asset value was considered at about K6.22 billion ($4.09 million) as of September 2018, per an official statement.
Yoma Strategic said it will fund the purchase by internal resources and recent financing activities.
“This acquisition doubles the footprint of our Yoma F&B store count and complements the international concepts we have already brought to Myanmar. YKKO will immediately be earnings accretive and will provide a tried and tested offering with a healthy cash flow,” said Yoma Strategic CEO Melvyn Pun.
The all-cash deal is the largest for a local food chain to date.
YKKO chairwoman Yu Yu Lwin will continue to hold the remaining 35 per cent stake. Her parents started YKKO as a small, family-owned business in Yangon in 1988 during the socialist regime and against the backdrop of the 8888 student uprising.
Its first shop was in Yankin township, from which its name YKKO was derived.
Yoma Strategic has been actively expanding its food and beverages presence. Last year, it signed a franchise agreement to bring pretzel chain Auntie Anne to the Myanmar market. It operates 26 KFC outlets across Myanmar and plans to launch Little Sheep Hotpot in the country soon.