CEO Series

BreadTalk Bakes Up Plans To Buy Food Court Operator Food Junction For S$80M In Cash

Singapore F&B giant BreadTalk Group is in talks to acquire the entire stake in Food Junction Management (FJM) for $80 million.

BreadTalk’s wholly-owned subsidiary, Topwin Investment Holding had entered into a sale and purchase agreement with seller Food Junction Holdings (FJH) on Friday (30 August).

According to The Business Times (BT), the total consideration of S$80 million will be paid in cash and funded through BreadTalk’s internal resources, including available cash on hand, and debt facilities.

The amount may be subject to adjustments to take into account the actual cash, debt and working capital of FJM as at completion of the acquisition.

The proposed acquisition will allow BreadTalk to obtain additional revenue streams, the company said.

It will complement its existing food court and F&B outlet business through the “streamlining of costs” and sharing of resources.

The move came after “after arms’ length negotiations” as they also took into account quality of the assets being acquired, the value of FJM’s existing network of food courts and F&B outlets to BreadTalk, among others.

FJM and its wholly-owned subsidiaries Food Junction Singapore and T&W Food Junction operate food courts and F&B outlets in Singapore and Malaysia.

They currently have a network of 12 food courts in Singapore, and three in Malaysia, with one more set to open in 2020 at The Mall, Mid Valley Southkey in Johor Bahru.

Under the BreadTalk umbrella, food court brands Food Republic and Food Opera run eateries in Singapore, Malaysia, China, Hong Kong, Taiwan, Cambodia, Thailand.

There are 14 food courts in Singapore and two in Malaysia owned by BreadTalk, as at June 30.

BreadTalk’s portfolio consists of brands such as BreadTalk, Toast Box, and Food Republic, as well as partner brands like Din Tai Fung, Nayuki, and Song Fa Bak Kut Teh.

The company has about 1,000 retail stores across 16 markets with its bakery, restaurant, food atrium, and 4orth food concepts.

Seller FJH is 98.1% owned by Auric Pacific Group Limited (APGL), a Singapore-incorporated investment holding firm.

APGL is 50.3% owned by Lippo China Resources, which is 74.99% owned by Lippo Limited.

The remaining 49.7% of APGL is held by tycoon Stephen Riady, chairman and executive director of Lippo and LCR, and his son-in-law, Andy Adhiwana.

Mr Riady is also executive chairman and controlling shareholder of OUE, a property developer.

This proposed acquisition is also subjected to approval by the shareholders of BreadTalk, LCR, and Lippo, among other things.

Founder of BreadTalk, Mr George Quek, first founded Food Junction in 1993 after spending over a decade in Taiwan.

The Food Junction chain grew over the years and he was nicknamed, “Foodcourt King”.

He stepped down as the managing director of Food Junction in 2000 and went on to establish BreadTalk.

Featured Image Credit: Chai Chok Keun

 

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