JFC will acquire CBTL for $350 million with an initial investment of $100 million. Through its wholly owned subsidiary Jollibee Worldwide Pte. Ltd. (JWPL, Singapore), JFC entered into an agreement to invest $100 million in a new Singapore-based holding company to acquire 100 percent of CBTL.
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Jollibee buys Coffee Bean and Tea Leaf for $350 M
Iris Gonzales (The Philippine Star) - July 25, 2019 - 12:00am

MANILA, Philippines — Jollibee Foods Corp. has gobbled up The Coffee Bean & Tea Leaf, a California-based coffee and tea shop giant, marking JFC’s biggest acquisition so far and moving the company a step closer to its goal of becoming one of the top five largest restaurant companies in the world.

The acquisition would also enable JFC to become a major player in the fast growing and lucrative coffee business.

JFC will acquire CBTL for $350 million with an initial investment of $100 million. Through its wholly owned subsidiary Jollibee Worldwide Pte. Ltd. (JWPL, Singapore), JFC entered into an agreement to invest $100 million in a new Singapore-based holding company to acquire 100 percent of CBTL.

The acquisition of CBTL will be JFC’s largest and most multinational so far with business presence in 27 countries, said JFC chairman Tony Tan Caktiong.

“This will bring JFC closer to its vision to be one of the top five restaurant companies in the world in terms of market capitalization,” he said.

CBTL will be JFC’s second largest business, next to the Jollibee brand and the coffee business will account for 14 percent of JFC’s worldwide system sales.

“Our priority is to accelerate the growth of The Coffee Bean and Tea Leaf brand particularly in Asia, by strengthening its brand development, marketing and franchise support system,” Tan Caktiong said.

The acquiring entity will be JWPL’s wholly owned subsidiary Java Ventures LLC, which will eventually be a wholly owned subsidiary of the new Singapore-based holding company.

CBTL is owned by International Coffee & Tea, LLC based in Los Angeles, California, whose current owners are Advent Coffee Holdings Corp., Alexandria II Corp., CBTL Holdings, The Sassoon Group LLC and ICT Incentive Holdings.

Founded in 1963, CBTL has 1,189 outlets around the globe as of the end of last year, of which 336 are company owned and 853 are franchised. It has 284 branches in the US, 447 in Southeast Asia (Philippines 139, Indonesia 101, Malaysia 99, Singapore 61), 336 in other Asian countries (South Korea 292), and 122 in other regions (Kuwait 36, Qatar 28, India 27).

JFC’s $100 million investment will represent 80 percent of the equity of the holding company with the balance of $250 million as advances to the new firm.

The holding company plans to issue within the next nine months preferred shares for an aggregate consideration of at least $250 million, which would be used to repay JFC’s advances.

It will also do an initial public offering in three to five years.

JFC’s Highlands Coffee, meanwhile, has 317 stores as of end-2018, of which 275 are in Vietnam and 42 in the Philippines. Sales grew 32 percent last year.

Meanwhile, the planned IPO of Highlands Coffee -- initially slated this month -- will be delayed and re-studied in light of the acquisition of CBTL.

This year, JFC plans to open at least 100 new Highlands Coffee stores,  mostly in Vietnam.

At present, JFC operates the largest food service network in the Philippines with a total of 4,613 stores worldwide.

JOLLIBEE FOODS CORP. THE COFFEE BEAN & TEA LEAF
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