Jollibee Foods (JFC) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition targets Korea’s leading, fast-growing value coffee chain, filling a gap in the coffee and tea segment and aligning with a capital-light, high-margin expansion strategy.

• South Korea is the third-largest coffee market globally by per capita consumption, offering significant growth potential.

• Compose Coffee’s 100% franchise model, rapid growth, and strong brand satisfaction support scalable expansion.

• Partnership with Elevation Equity brings local market expertise and proven F&B franchise success.

• The deal complements existing premium and specialty brands, positioning for value segment leadership and international growth.

Financial terms and conditions

• JFC will acquire a 70% stake in Compose Coffee for KRW 470 billion (~$340 million), with the remainder held by Elevation Equity Partners (25%) and Titan Dining Investment (5%).

• The business is debt-free, with KRW 70 billion in starting cash, and the acquisition is financed with a 47% debt and 53% cash mix.

• Trailing EV/EBITDA multiple is 8x (2023), expected to drop below 7x in 2024.

• Compose Coffee will be consolidated into JFC’s financials immediately upon deal completion, with an estimated +2% uplift in revenues and +12% in EBIT in 2024.

Synergies and expected cost savings

• In-house roasting and logistics outsourcing enable lowest market costs and high-quality beans, supporting 42% EBITDA margins.

• JFC’s F&B brand development and Elevation’s local expertise expected to drive sustainable growth.

• Menu innovation and brand development are expected to drive higher average sales per store.