Jollibee Foods (JFC) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition targets South Korea's fast-growing value coffee segment, the third largest globally by per capita consumption, with no current value coffee presence in the acquirer's portfolio.

• Compose Coffee operates a 100% franchise model, aligning with the acquirer's capital-light expansion and franchising strategy.

• The deal strengthens the coffee and tea segment, complementing existing premium and specialty brands and providing a scalable platform in Korea's high-margin sector.

• Partnerships with Elevation and Titan Fund II bring deep local market expertise and proven F&B franchise success.

• Compose Coffee's rapid growth and strong brand satisfaction offer a gateway to Korea's competitive coffee market.

Financial terms and conditions

• The acquirer will take a 70% stake in Compose Coffee for approximately KRW 470 billion (~USD340 million), with Elevation holding 25% and Titan Dining Investment/Titan Fund II 5%.

• Compose Coffee is debt-free, with KRW 70 billion cash on its balance sheet at closing.

• Acquisition multiple is 8x 2023 EBITDA, expected to drop to 6.7x on a forward basis.

• Funding is split 47% debt and 53% cash, with debt to be repaid from Compose dividends.

• Final purchase price is subject to closing and financing conditions.

Synergies and expected cost savings

• Synergies expected from combining F&B brand development expertise with local market knowledge.

• In-house roasting plant and proprietary supply chain enable lowest cost, highest quality beans for franchisees.

• Cost competitiveness achieved through volume purchasing, efficient logistics, and lean operations.