Industry

Jollibee to Buy The Coffee Bean & Tea Leaf for $350M

The initial investment is priced at $100 million, which JFC will pay in cash.
IMAGE FACEBOOK/ @JollibeeSG
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The Philippines’ largest fast food chain, Jollibee Foods Corporation (JFC), announced earlier today that the company will soon acquire 100 percent of U.S.-based international coffee brand The Coffee Bean and Tea Leaf (CBTL) for $100 million, currently equivalent to P5.126 billion. The purchase will be made through the subsidiary of Jollibee Worldwide Pte Ltd (JWPL, Singapore), Java Ventures, LLC (United States), and CBTL’s Singapore-based holding company. 

According to Jollibee Food Corporation Chairman Tony Tan Caktiong, the acquisition of CBTL marks JFC’s “largest and most multinational so far,” as the specialty coffee brand already has a presence in 27 countries.

The purchase hopes to bring JFC closer to being among one of the top F&B corporations in the world. According Caktiong, JFC predicts that the acquisition of CBTL will contribute an additional 14 percent to its global sales, 26 percent to its total store network, and 36 percent to its international business’ contributions to worldwide sales.

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After Jollibee, CBTL will now be JFC’s second largest business venture.

Total price of acquisition

The total consideration for this acquisition will be $350 million on a debt-free basis, in which the acquired business will have no debt upon acquisition.

The acquiring party will pay the $100 million purchase price in cash, as per JFC’s company disclosure posted on the Philippine Stock Exchange earlier today.

JFC, through JWPL, will finance the entire acquisition through a bridge loan. JFC’s initial $100 million investment will represent 80 percent of equity of the holding company with the remaining balance of $250 million as advances to the new holding company.

The fastfood giant will acquire all 138,471,534.20 common units and 7,993,784.33 incentive units of CBTL.

As of December 2018, Jollibee currently has 1,189 outlets in the Philippines and abroad. Aside from CBTL, JFC also has stakes in Highlands Coffee, Chowking, Greenwich, Red Ribbon, Mang Inasal, Burger King, PHO24, Panda Express, Yonghe King, Hong Zhuang Yuan, Dunkin’ Donuts, Hard Rock Café, and Smashburger.

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JFC Chairman Tony Tan Caktiong set up Jollibee back in 1987 after opening an ice cream parlor franchise for P350,000 at just 22 years old. Now, his corporation is valued at $5.9 billion.

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Anri Ichimura
Staff Writer, Esquire Philippines
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