Prior to the completion of the acquisition deal, the Tenderfresh business will be restructured and consolidated.

Published 2021-05-11 11:00:53

Catalist-listed coffeeshop operator Kimly said in a Singapore Exchange filing today (May 11) that it has entered into an acquisition agreement with Tenderfresh founders Soh Chun King, Koh Siew Tin and Chew Kian Ho.

It is acquiring a 75 per cent stake in home-grown food business Tenderfresh for S$54 million as part of its efforts to expand its presence in the local halal food industry and regionally.

Out of this figure, S$38 million will be paid in cash, while the remaining S$16 million will be satisfied by the issuance of 51.2 million Kimly shares at an issue price of 31.24 cents.

The proposed acquisition comprises central kitchens, restaurants, kiosks, food stalls, plant and equipment, trademarks and customer relationship, which operate via various entities.

Kimly has also granted a put option to Tenderfresh’s vendors, which in turn have granted Kimly a call option. Both the put and call options are “evergreen” and will allow Kimly to acquire the remaining 25 per cent stake in Tenderfresh five years after the completion date.

Kimly expects the proposed acquisition to be completed within the next five months.

Prior to the completion of the deal, the Tenderfresh business will be restructured and consolidated. A new entity will be incorporated to hold the business, which Kimly will own 75 per cent.

Making headways in the halal industry

Founded in 1979, Tenderfresh specialises in fried or roasted spring chickens and chicken wings.

It started out as a hawker stall at Whitley Road Hawker Centre in the 1970s but fast forward to 2020, it owns 18 F&B brands and 64 outlets, including food kiosks, catering, retail outlets, and original equipment manufacturing (OEM).

Some of its brands include Amigo’s, ToriGo!, Tenderbest, Golden Rooster and i chicks.

It also operates a 25,000 square foot central kitchen which caters to about 140 brands and outlets. The kitchen also supplies semi-finished products to its own outlets.

“As more food and beverage operators look to outsource their food production to reliable OEM partners to reduce manpower needs, the group believes that this will generate new revenue streams,” Kimly said.

Moreover, since Tenderfresh’s central kitchen is halal-certified, Kimly believes it can tap on this and its wide network in the halal food market to make further headway into the industry.

Singapore’s Halal mark and standard is also recognised by Brunei, Indonesia and Malaysia, noted Kimly.

This new acquisition is not their first encounter together. In November last year, Tenderfresh partnered with Kimly to develop Kedai Kopi, a new halal coffeeshop concept at Clementi.

This is also not Kimly’s first acquisition. In June 2020, it completed the acquisitions of six food outlets for S$35.5 million, comprising of two coffeeshops, three industrial canteen units and a restaurant unit.

Over the years, many other larger F&B players are also buying over smaller operators.

Some other notable acquisition deals in the local F&B industry are Jumbo Group and Kok Kee Wanton Noodle for S$2.1 million in cash and shares; as well as electronics firm Aztech group’s acquisition of Kay Lee Roast Meat for S$4 million, which only took 10 minutes to seal the deal.

Featured Image Credit: Kimly Coffeeshop / Daniel Food Diary

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