SINGAPORE: BreadTalk Group on Monday (Sep 2) announced its intention to acquire food court operator Food Junction Management (FJM) for S$80 million through subsidiary Topwin Investment Holding.
In a filing to the Singapore Exchange, the food and beverage group said its wholly owned subsidiary Topwin had entered into a sale and purchase agreement on Aug 30 for the proposed acquisition of FJM from Food Junction Holdings.
The total consideration of S$80 million will be paid in cash and will be funded through BreadTalk Group's internal resources - including available cash on hand - and debt facilities, according to the filing.
The amount could be subject to further adjustments to take into account actual cash, debt and working capital of FJM as at completion of the acquisition.
The figure was arrived at after "arms’ length negotiations", said BreadTalk Group in its filing.
It took into consideration factors such as the quality of the assets being acquired and the strategic value of FJM’s existing network of food courts and outlets to BreadTalk Group, as well as its financials, earnings quality and future potential.
FJM and its wholly owned subsidiaries Food Junction Singapore and T&W Food Junction operate food courts and food and beverage outlets in Singapore and Malaysia.
They collectively operate a network of 12 food courts in Singapore and three in Malaysia, with another one scheduled to open in Johor Bahru next year.
BreadTalk Group operates food courts under the Food Republic and Food Opera brands across Singapore, Malaysia, China, Taiwan, Cambodia and Thailand.
As at Jun 30 this year, BreadTalk Group operates 14 food courts in Singapore and two in Malaysia.
In its filing, BreadTalk Group said the acquisition would provide it with access to Food Junction Management's network of food courts and outlets, allowing it to obtain additional revenue streams and "benefit from the synergies" with BreadTalk Group's existing food courts and outlets, through the streamlining of costs and sharing of resources.
"Accordingly, the proposed acquisition is not considered to be a diversification of the group's business," it said.
The proposed acquisition is conditional upon shareholder approval of BreadTalk Group, Lippo China Resources and Lippo, among other considerations.
Food Junction Holdings is 98.1 per cent owned by Auric Pacific Group.