CURRENT REPORT UNDER SECTION 17 OF THE SECURITIES REGULATION CODE AND SRC RULE 17.2(c) THEREUNDER
1. Date of Report (Date of earliest event reported)
Jul 11, 2024
2. SEC Identification Number
77487
3. BIR Tax Identification No.
000-388-771
4. Exact name of issuer as specified in its charter
JOLLIBEE FOODS CORPORATION doing business under the name and style of Jollibee
5. Province, country or other jurisdiction of incorporation
PHILIPPINES
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
10/F JOLLIBEE PLAZA BUILDING, 10 F. ORTIGAS JR. AVENUE, ORTIGAS CENTER, PASIG CITY Postal Code1605
8. Issuer's telephone number, including area code
(632) 8634-1111
9. Former name or former address, if changed since last report
N/A
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class
Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
Common
1,120,864,017
Treasury
16,447,340
Preferred Shares (JFCPA)
3,000,000
Preferred Shares (JFCPB)
9,000,000
11. Indicate the item numbers reported herein
-
The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.
Jollibee Foods CorporationJFC
PSE Disclosure Form 5-1 - Substantial Acquisitions References: SRC Rule 17 (SEC Form 17-C) and Section 4.4 and/or Section 5 of the Revised Disclosure Rules
Subject of the Disclosure
JFC to Acquire Most Loved South Korean Value Coffee Brand
Background/Description of the Disclosure
Jollibee Foods Corporation (JFC, also known as the Jollibee Group), one of the largest Asian food service companies today signed definitive agreements such that its wholly owned subsidiary, Jollibee Worldwide Pte. Ltd. (JWPL) shall acquire majority shareholding of effectively 70% in “Compose Coffee Co., Ltd.” and “JMCF Co., Ltd.” collectively called “Compose Coffee”. The remaining shareholdings shall be held by Titan Dining Partners II Ltd. (Titan Fund II) and Elevation Equity Partners Korea Limited (Elevation) with effective shareholdings of 5% and 25%, respectively.
Date of Approval by Board of Directors
Jul 2, 2024
Date of Approval by Stockholders
N/A
Other Relevant Regulatory Agency, if applicable
N/A
Date of Approval by Relevant Regulatory Agency
N/A
Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction
This 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 3rd globally in terms of coffee consumption per capita.
Description of the transaction including the timetable for implementation and related regulatory requirements, if any
The Shareholders Agreement among the Purchasers and the Share Purchase Agreement between Purchasers and Sellers have been signed on July 2, 2024. Thereafter, Sellers will comply with closing conditions and Purchasers will obtain regulatory approval for the transaction in Korea. Completion of this transaction is subject to standard legal agreements and regulatory authority approval.
Identities of the parties to the transaction
Name
Nature of Business
Nature of any material relationship with the Issuer, their directors/officers or any of their affiliates
JWPL
Holding Company
Wholly-owned subsidiary of Issuer
Elevation
Private Equity Fund
None
Titan Fund II
Special purpose company
JWPL has 90% interest in Titan Fund II
Jaeseok Yang
N/A
None
Jihwan Yang
N/A
None
Terms and conditions of the transaction
The nature and amount of consideration (e.g. price per share, the aggregate amount)
The total consideration for the acquisition is approximately KRW470 billion (circa USD340 million) at ~8x EV/EBITDA multiple: Compose Coffee Co., Ltd. : 30,000 common shares for KRW 12,026,360 per share JMCF Co., Ltd.: 10,000 common shares for KRW 10,920,920 per share
Basis upon which the amount of consideration or value of the transaction was determined
Total consideration of KRW 470Bn is based on ~8x EV/EBITDA multiple on FY2023 EBITDA of KRW 58Bn.
Ratio/percentage to total outstanding capital stock
100
Terms of payment
Payment of the Purchase Price will be made on Closing, subject to adjustments.
Conditions precedent to closing of the transaction, if any
Completion of this transaction is subject to standard legal agreements and regulatory authority approval. We have been advised by counsel that regulatory approvals will take approximately 45 days.
Description of the company subject of the transaction
Nature and business
Compose Coffee Co., Ltd. – coffee franchise business in Korea JMCF Co., Ltd. – coffee roasting and manufacturing
Discussion of major projects and investments
Not applicable.
List of subsidiaries and affiliates, with percentage holdings
Name
% Ownership
N/A
-
Capital structure
Authorized capital stock
Type of Security
Amount
Number of Shares
Common Stock - Compose Coffee Co., Ltd
KRW 300,000,000
30,000
Common Stock – JMCF Co., Ltd.
KRW 100,000,000
10,000
Subscribed Shares
Type of Security
Amount
Number of Shares
Common Stock – Compose Coffee Co., Ltd.
KRW 300,000,000
30,000
Common Stock – JMCF Co., Ltd.
KRW 100,000,000
10,000
Paid-Up Capital
Amount
Compose C: KRW300,000,000 and JMCF: KRW100,000,000
Representative Director (both Compose Coffee and JMCF)
Principal Officers
Name
Position/Designation
Mihee Kim
Executive Officer
Effect(s)/impact on the business, financial condition and operations of the Issuer
Compose Coffee has a debt-free balance sheet, superior cash returns and excellent profitability margins, evidenced by its high double-digit Earnings before Interests, Taxes and Depreciation and Amortization (EBITDA) and EBIT margins due to its capital-light, 100% franchised business model. Compose Coffee will be consolidated into JFC’s financial statements immediately upon completion of the acquisition, with an estimated uplift of +2% in Revenues bringing the international business’ contribution to 41% of Global Revenues, +12% in EBIT in 2024 and +34% in store count (2,600+ stores). Compose Coffee will be JFC’s biggest brand in terms of number of stores. It will bring JFC’s store network closer to 10,000 stores, more than 66% of which will be outside the Philippines. Compose Coffee will also further strengthen JFC’s Balance Sheet since it has no existing loans nor non-trade obligations.
Other Relevant Information
This disclosure has been amended to provide the English translations of the following documents:
1. For Compose Coffee Co. Ltd., its Articles of Incorporation, Corporate Registry, Shareholders List, Complete set of Financial Statements (Balance Sheet, Income Statement, Changes in Equity and Cash Flow Statements.) 2. For JMCF Co., Ltd., its Articles of Incorporation, Corporate Registry, Shareholders List, Complete set of Financial Statements (Balance Sheet, Income Statement, Changes in Equity and Cash Flow Statements.)
As previously provided, please see below the following information on the transaction documents in relation to the acquisition of Compose Coffee and JMCF. These are the salient provisions of the Share Purchase Agreement and Shareholders' Agreement.
Details of the Shareholders Agreement: 1. There are 3 board seats. JWPL will have 2 seats while Elevation will have 1 board seat 2. Chairman will be Richard Shin of JFC. 3. There are no planned changes in the management of Compose Coffee and JMCF.
Details of Share Purchase Agreement: 1. Purchase Price is KRW470Bn (subject to adjustments upon Closing) 2. Shareholding Proportion: JWPL: 70%; Elevation 25%; Titan Fund II 5% (effective shareholding) 3. Closing conditions include regulatory approval in Korea 4. Subject to Longstop date of December 31, 2024
Jollibee Foods CorporationJFC