The Philippines-based foodservice company, which bought a 40% stake in Smashburger in 2015, has acquired another 45% of the Denver-based fast-casual burger chain for $100 million, giving it a controlling, 85% stake.
“Jollibee has been an invaluable strategic partner to date,” Smashburger CEO Tom Ryan said in a statement. “Our momentum in 2017 around improved guest experience, iconic and record-setting product launches and innovative marketing provide JFC a tremendously strong brand to enter the North American market.”
Jollibee had been eyeing a brand it could use to make an entrance in the North American restaurant market when it took its original stake in Smashburger. The acquisition now gives the foodservice company control over the burger chain, which Smashburger believes could help to fuel its growth.
Smashburger was founded in 2007 by Ryan and Rick Schaden, the former owner of the Quiznos sandwich chain, who funded the brand’s startup through his private-equity firm, Consumer Capital Partners.
Yet the chain struggled some in 2017 amid a difficult operating environment, and it closed some locations—it says it has 360 locations, down from 374 a year ago.
The $100 million essentially gives Smashburger an enterprise value of more than $220 million, down from the $335 million enterprise value the chain had when Jollibee bought its original stake in the chain.
Yet Smashburger spent much of the past year working furiously to build sales. It launched and sold nearly 2 million Triple Double Burgers, which the company said helped build sales. It also launched Smash Pass at the end of the year, a subscription that gave customers steep discounts on the chain’s burgers.
The deal with JFC could also help open up more international development, executives said.
“This reinforced strategic partnership with JFC will allow Smashburger to continue to focus on growth in both existing and new markets,” Bradford Reynolds, Smashburger’s CFO, said in a statement. He said that the deal gives the company the opportunity to expand to Southeast Asia.
JFC operates the largest foodservice network in the Philippines, operating 2,875 restaurant locations in the country, including 93 Burger King units as well as more than 1,000 units of its own Jollibee brand. It operates 924 locations in other countries in various brands, including 43 Dunkin’ Donuts units in China.