Jollibee to acquire majority of Mang Inasal

By Cheryl M. Arcibal
Fastfood heavyweight makes another acquisition; Mang Inasal founder to retain minority stake

Jollibee Foods Corp., the country's largest owner and operator of quick service restaurants, acquired the majority share of Mang Inasal, the Tony Tan Caktiong-led company announced on Monday.

In a disclosure to the Philippine Stock Exchange, JFC said its unsolicited offer to buy 70 percent of Mang Inasal Philippines, Inc. for about P3 billion has been "unconditionally and irrevocably accepted" by Injap Investments, Inc., the parent company of Mang Inasal. JFC added that Mang Inasal's acquisition will add five percent to its revenues and seven percent to its net operating income.

The remaining 30 percent will be retained by Injap. [Find out how Jollibee survived the economic crisis here]

Under the terms, JFC had to give Injap P200 million as initial payment. Ninety percent of the remaining amount or about P2.52 billion will be paid on the closing date of the transaction (30 days upon JFC's completion of due diligence), while the remaining 10 percent will be paid over a period of three years.

Besides improving its revenues and profits, Mang Inasal's acquisition, JFC added, would "also increase JFC's store network in the Philippines by 19 percent and on a worldwide basis by 16 percent." [Read about Mang Inasal and his road to success here]

As of October 18, the Mang Inasal chain has 303 stores, of which 279 are franchised and 24 are company-owned.

It is estimated that Mang Inasal annually earns P2.6 billion and registers sales of P3.8 billion.

"JFC will build shareholder value by growing the sales of Mang Inasal's existing stores through the application of JFC's knowledge of consumers and its available recipes and products, continued expansion of Mang Inasal's store network, cost improvement on its raw materials, and greater operational efficiency...," JFC said.

The company also added that it intends to maintain Mang Inasal's current personnel, subject to their meeting the group’s organizational standards. [Read about Mang Inasal's startup story here]

Pricewaterhouse Coopers- Isla Lipana & Co. and KPMG-Manabat Sanagustin & Co and Romulo Mabanta, Buenaventura Sayoc and De Los Angeles were tasked to handle the financial, tax and legal due diligence of the transaction.

As of September 30, JFC had a total of 1,578 stores in the Philippines and 375 stores abroad.

Besides Jollibee, JFC also owns Chowking, Red Ribbon, Greenwich and Manong Pepe's. In China it owns and operates Yonghe King and Hong Zhuang Yuan. JFC stores are also present in the US, Vietnam, Brunei and Indonesia.

JFC recently announced that it would be selling its stake in Delifrance.


Related Articles:

Jollibee to sell Delifrance

Greenwich to add more stores

Jollibee, Singaporean firm partner for a commissary in China

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