Manila, Philippines – Jollibee Foods Corporation (JFC) has announced that is acquiring a majority stake in Compose Coffee, a South Korean coffee chain. According to a recent disclosure from JFC, the group shall acquire a majority shareholding of effectively 70% in said coffee chain. The rest of Compose Coffee’s shareholders are Titan Dining II LP (5%) and Elevation (25%).
Moreover, the total consideration for the acquisition is approximately US$340m (~KRW470b). JFC closed this deal at a more favourable transaction multiple compared to average EV/EBITDA multiple in the coffee industry. Completion of this transaction is subject to closing and financing conditions, final purchase price to be confirmed thereafter.
JFC notes that the acquisition is aligned with JFC’s commitment to Coffee and Tea Segment and franchising initiatives. This strategic, rapid growth, financially lucrative investment serves as JFC’s gateway in unlocking the fast-growing international value coffee market in South Korea which ranks third globally in terms of coffee consumption per capita.
Tony Tan Caktiong, chairman at Jollibee Foods Corporation, said, “The business that Compose Coffee has built in the past 10 years is impressive and we are excited to play a major role in its next phase of growth. We believe that Compose Coffee is a compelling strategic fit for JFC and is on track to becoming the largest, fastest growing and leading value coffee player in South Korea.”
He added, “Together with Elevation and Titan Fund II, we look forward to working with the Compose Coffee’s accomplished management team to further accelerate the company’s growth in existing and new markets and capture the significant whitespace in South Korea’s value coffee market.”
It is worth noting that JFC has made significant investments to multiple food franchises in Asia, including Singapore’s Tiong Bahru Bakery and Common Man Coffee, as well as China’s Tim Ho Wan.