Jollibee seals P3-billion Mang Inasal deal

MANILA, Philippines - Jollibee Foods Corp. (JFC), said yesterday it has sealed the purchase of a 70-percent equity in fast-growing chicken barbeque chain Mang Inasal in a deal valued at P3 billion.

In a disclosure to the Philippine Stock Exchange, JFC said it has remitted P1.55 billion to Mang Inasal Philippines Inc., which owns the grilled chicken restaurant chain, and expects to pay an additional P1.15 billion on Nov. 22. 

JFC said it would settle the remaining P300 million of the total consideration over the next three years as assurance for indemnification against the seller’s representations and warranties.

Edgar “Injap” Sia II, the founder and owner of Mang Inasal, through Injap Investments Inc., will keep a 30-percent interest in the company.

On an annual basis, JFC’s purchase of 70 percent of Mang Inasal is estimated to add at least five percent to its worldwide system-wide sales, five percent to its revenues, and seven percent to its net operating income (net of 30 percent minority shares).

The purchase price for Mang Inasal is comparable to JFC’s previous acquisitions in terms of EBITDA and price-to-earnings multiple using Mang Inasal’s estimated recurring profit.

“Mang Inasal has successfully grown the grilled chicken in the Filipino cuisine segment of the fastfood industry. It has been the fastestgrowing network in the Philippine food service business in the last three years behind very good tasting food, excellent value and focused branding,” JFC chairman and chief executive officer Tony Tan Caktiong.”

“The local cuisine segment of the quickservice restaurant has a very significant potential and we look forward to growing Mang Inasal even more in the years ahead by further enhancing its quality and value proposition to the Filipino consumers in the Philippines and abroad. We warmly welcome Mang Inasal to the Jollibee Group.” an Caktiong said.

For his part, Sia said the Jollibee Group will enable Mang Inasal to go to a higher level of expansion and performance.

“With JFC’s scale and resources, Mang Inasal will be able to secure even better store locations, more franchises, lower cost of raw materials and supplies and better management systems and technology. I also look forward to bringing Mang Inasal to our fellow Filipinos in the United States and other foreign countries as part of JFC’s rapid expansion abroad.”

As of Nov. 3, Mang Inasal had a network of 312 stores in the country of which 28 were company-owned and 284 franchised stores. It will end the year with a total network of 340 stores.

Mang Inasal branches will expand the JFC Group’s store network in the country by 20 percent and worldwide by 16 percent. 

Mang Inasal operates two commissaries, one in Iloilo City and another in Taguig, Metro Manila. A third commissary in Davao del Norte is slated to to be operational by the end of the month.

The JFC Group is the country’s largest fastfood network with a total of 1,578 stores in the country as of end-September 2010 — Jollibee (702), Chowking (404), Greenwich (218), Red Ribbon with (215), Delifrance (23) and Manong Pepe’s with (15).