MILAN – Jollibee Foods Corporation (JFC), one of the largest Asian food service companies, will acquire a 70% stake in South Korea’s Compose Coffee for a total consideration of $340 million. Compose Coffee was established in Busan in 2014. As of the end of 2023, Compose Coffee ranked as South Korea’s third-largest coffee chain.
The leading chains in the country are Ediya, with around 3,000 locations, and Mega, with 2,709 outlets.
In a disclosure to the Philippine Stock Exchange, Jollibee Foods Corp’s (JFC) wholly owned subsidiary, Jollibee Worldwide Pte Ltd (JWPL), announced it will 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.
Compose Coffee has 2,470 stores, all franchised, giving it a debt-free balance sheet, and good cash returns and profitability margins, said Jollibee.
“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 per cent of which will be outside the Philippines,” the company was quoted saying.
“This acquisition is aligned with JFC’s commitment to Coffee and Tea Segment and franchising initiatives” the company also stated in the disclosure.
“This strategic, rapid growth, financially lucrative investment serves as JFC’s gateway in unlocking the fast-growing international value coffee market in South Korea.”
“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,” said JFC Chairman Tony Tan Caktiong in a statement.
He added that “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.”
“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,” Tan Caktiong concluded.
JFC is also a leading player in the U.S coffee market since it owns 100% of Los Angeles- based chain Coffee Bean & Tea Leaf, which it purchased in 2019. JFC also owns Vietnam-based Highlands Coffee and Philippines-based Coffee Man Coffee Roasters.
