Jollibee Foods to acquire Compose Coffee with deal worth $340m

Jollibee Foods to acquire Compose Coffee with deal worth $340m

July 06 - 2024

Coffee Geography Magazine

The Philippines' Jollibee Foods is in progression to acquire a majority stake in South Korea's Compose Coffee, as part of a deal mounting to $340 million. Jollibee's largest acquisition by number of stores continues the company's expansion overseas, which will account for majority of its branches in the future. 

Jollibee's unit Jollibee Worldwide Pte will acquire 70% of privately held Compose Coffee for $238 million, and its majority-owned Titan Fund will take 5%, the fast-food firm. The remaining 25% will be held by private equity firm Elevation.. 

"This is a good move by Jollibee to further expand its global footprint and take advantage of attractive opportunities in promising markets," said Juan Paolo Colet, managing director at investment bank China Bank Capital in Manila. The acquisition is expected to be cash accretive, creating shareholder value over the long run, he added.

Compose Coffee has 2,470 stores, all franchised, giving it a debt-free balance sheet, and good cash returns and profit margins which will increase its global store network to 10,000 with the deal. 

The investment gives Jollibee access to South Korea, which ranks third globally in terms of coffee consumption per capita. Compose Coffee and its roasting facility were founded in Busan in 2014. 

Known for its sweet-style spaghetti, burgers and fried chicken, Jollibee is dominant in the Philippines, outselling McDonald's and Yum Brands' KFC. In 2019, Jollibee invested $100 million to acquire loss-making Coffee Bean & Tea Leaf.