Philippines’ Jollibee Foods Corp. said on Wednesday it is spending US$350 million to buy US brand Coffee Bean & Tea Leaf.
In a filing to the Philippine Stock Exchange, Jollibee said it had entered into an agreement through its wholly owned subsidiary Jollibee Worldwide to invest US$100 million in a new Singapore-based holding company to acquire 100% of the Los Angeles-based speciality coffee and tea brand, Channel News Asia (CNA) reported.
It will invest US$100 million for an 80% share in a Singapore holding company that will acquire The Coffee Bean & Tea Leaf. The remaining 20 per cent stake will be owned by JFC’s partner in its Vietnam coffee and restaurant business.
JFC will invest another US$250 million, which will be paid back by the holding company, CNA reported.
The acquiring entity will be Jollibee Worldwide’s subsidiary Java Ventures, which will eventually be a subsidiary of the new holding company.
Jollibee operates the largest fast-food chain in the Philippines with 3,195 restaurants. It also operates 1,418 stores across various brands overseas.
“The acquisition of The Coffee Bean & Tea Leaf brand will be (Jollibee Foods Corp)’s largest and most multinational so far with business presence in 27 countries,” said Jollibee chairman Tony Tan Caktiong in the filing.
“This will add 14 per cent to its global system-wide sales, 26 per cent to its total store network, will bring international business’ contribution to 36 per cent of worldwide sales and will bring (Jollibee Foods Corp.) closer to its vision to be one of the top five restaurant companies in the world in terms of market capitalization.”
Jollibee also operates Highlands Coffee in Vietnam, among other brands worldwide, CNA reported.
“Combined with Highlands Coffee, with business mostly in Vietnam, this acquisition will enable (Jollibee Foods Corp) to become an independent player in the large, fast-growing and profitable coffee business,” said Tan.
Known for its fried chicken, sweet spaghetti and “Aloha burger,” Jollibee serves fast-food with a Filipino twist. The spaghetti, for instance, includes cheese and mini hot dogs, and the fried chicken is meant to be eaten with rice and gravy.
According to Retail News Asia, it first came to the U.S. in 1998, opening locations in areas with large Asian populations including California, Hawaii and Illinois.
The company’s latest investments and openings, including one near Manhattan’s Times Square, are part of a new strategy that the company hopes will make it one of the “top five restaurant companies in the world.”
Jollibee executives hope to open 150 stores in the U.S. and 100 stores in Canada over the next five years.
“This is our entry into the mainstream, not just Filipino, market — we are catering to a bigger spectrum, and want to keep strengthening our foothold both in the U.S. and globally,” CEO Ernesto Tanmantiong, said.