The Philippines’ biggest restaurant operator says it will buy a majority interest in Denver hamburger company Smashburger for $100 million.
Jollibee Foods Corp., or JFC, bought a 40 percent interest in Smashburger, the chain’s legal name, back in October 2015 for an estimated $100 million.
Now it intends to buy another 45 percent interest in Smashburger parent SJBF LLC from holding company Smashburger Master LLC for another $100 million, company officials said, bringing its ownership stake in Smashburger to 85 percent.
“JFC will be able to participate in the very large mainstream American consumer market in addition to serving Filipino-Americans there,” Jollibee said in a statement to the Philippine Stock Exchange, per Reuters news service.
Smashburger Master will retain the remaining 15 percent stake.
The transaction is pending U.S. government approval.
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JFC has a market value of $5.7 billion, Reuters reports. The company says it operates 2,875 restaurants in the Philippines and 924 in other countries, including 37 Jollibee locations and 33 Red Ribbon outlets in the U.S. It also has major operations in China and Vietnam.
As the DBJ’s Ed Sealover reported in 2015 when JFC acquired its minority stake in Smashburger, “Jollibee’s history with the brands it’s acquired … shows that it has kept local leaders in place and has continued to nurture those chains rather than turn around and sell them off.”
“Jollibee has been an invaluable strategic partner to date,” said Tom Ryan, co-founder and CEO of Smashburger, in a statement.
“Our momentum in 2017 around improved guest experience, iconic and record-setting product launches, and innovative marketing provide JFC a tremendously strong brand to enter the North American market,” he said. “Our entire team couldn’t be more excited to grow the Smashburger brand and share the great tastes of Smashburger with the world.”
Bradford Reynolds, the chain’s CFO, said the “reinforced strategic partnership with JFC will allow Smashburger to continue to focus on growth in both existing and new markets including the opportunity to bring our great tasting burgers, fries and hand-spun shakes to Southeast Asia. We look forward to building upon our successful relationship to further bolster the brand as an international leader in the better burger segment.”
Smashburger was founded in 2007 with funding from Consumer Capital Partners, a Denver private equity firm led by Rick Schaden, who currently is Smashburger’s chairman, and his father, Richard Schaden.
It says it currently has 360 corporate-owned and franchise locations operating in 38 states and nine countries.
Ryan became Smashburger’s CEO in December 2016 when Michael Nolan left the position less than eight months after taking the role. Nolan had taken over for Scott Crane as chief executive; Crane succeeded David Prokupek in the position in 2013.
In May, Smashburger finished ninth in the annual Harris Poll EquiTrend rankings of “Burger Restaurant Brand of the Year.”
Smashburger ranked No. 7 on the annual Denver Business Journal list of “2017 Franchises” with 371 units as of Feb. 1, 2017.
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