JOLLIBEE OFFICIALLY OWNS CBTL | Marvin Germo

JOLLIBEE OFFICIALLY OWNS CBTL

By: Marvin Germo | September 25, 2019

$350-Million Deal Closed

It’s official, Jollibee Foods Corporation (JFC) owns The Coffee Bean & Tea Leaf (CBTL) now! Our favorite homegrown fast-food chain has closed the $350-Million deal with CBTL that was announced about two months ago. The disclosure was made just yesterday that the firm has completed all the required conditions to close the deal, which includes the necessary government approvals that are written in the purchase agreement. Let’s see how the acquisition goes with the information we have about this news.

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The heart of why I do these seminars is I want to build a generation of Filipinos with the right foundation in stock investing.  I want to bring smart investing to every Filipino around the world! If you would like to know more about how you could time the market check out the trainings below.

Stock Smarts Manila – September 14, 15, 21, 22,&28, 2019
Stock Smarts Qatar —  October 3 – 6, 2019
Stock Smarts Cebu – October 26-27,2019
Stock Smarts Taiwan – November 2, 2019
ICON Davao – November 30, 2019

Debt-Free Basis Acquisition

JFC acquired CBTL on a debt-free basis. This means that upon purchase, CBTL will have no debt. JFC utilized Java Ventures, LLC as its acquiring entity. Java Ventures is known to be a US-based unit of Singapore-based Super Magnificent Coffee Co. Pte. Ltd.—a subsidiary of Jollibee Worldwide Pte. Ltd. (JWPL). JWPL also entered into bridge loans to pay for the acquisition through different financial institutions. To date, CBTL is the largest acquisition of the firm with branches in 27 countries. Last August 31, the famous coffee shop has 1,180 outlets, 336 of them are company-owned and 844 are franchised. It generated a net loss of $21.38 million in 2018 following its revenues of $313 million.

Financial Reporting

Jollibee will have consolidated financial statements including the Los Angles based CBTL. The new brand will be incorporated into the report of the company upon acquisition. For the company, the acquisition of this famous coffee shop is considered as its largest and most multinational among its businesses in 27 countries. I have been a long term fan of Jollibee and this is just historic. This is proof that a local company is becoming a multinational player. Noted as well that the negative side of this transaction is that Coffee Bean has lost money in the past 2 years of operation.

The Good Side Of Acquisition

The acquisition of CBTL will add 14% to the global system-wide sales of JFC. 26% will be added to its total store network and a 36% increase will go to worldwide sales. Overall, this transaction will bring JFC near to its vision to be one of the top five restaurants in the whole world when it comes to market capitalization. Together with Highlands Coffee and its business mostly active in Vietnam, JFC will have a very important role in the large and quickly growing industry of coffee business. After the Jollibee brand, CBTL will be JFC’s second-largest brand.

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