Jumbo Group To Acquire 75% Stake In Kok Kee Wanton Noodle For $2.1M
Food and beverage company Jumbo Group is reportedly looking to acquire a 75% stake in popular Kok Kee Wanton Noodle dumpling noodle stand for $ 2.1 million in cash and shares.
The acquisition comes after Jumbo announced last night (November 26) a net loss of approximately S $ 8.2 million for its fiscal year ended September 30 – in contrast to its net profit of S $ 11.7 million. the previous year.
In addition, its revenue fell 36.5% to S $ 97.6 million, from S $ 153.6 million a year ago, mainly due to the impact of Covid-19.
According to The Business Times, Jumbo will use its internal resources to pay 70% of the purchase price in cash.
The remaining 30 percent will be satisfied by the allotment and issuance of Jumbo shares according to an agreed formula. The purchase price will be paid in two fixed installments.
First inorganic expansion of the Jumbo group
If the acquisition goes through, Kok Kee owner Leong Goh Lian will continue to own the remaining 15 percent.
The Jumbo Group, which owns a stable of restaurant brands including Jumbo Seafood and Ng Ah Sio Bak Kut Teh, plans to expand Kok Kee’s network locally.
It also intends to make people discover the “local heritage dish” of disgusting me beyond the shores of Singapore.
Kok Kee Wanton Noodle started out as a modest booth in Lavender Food Square in 1985.
It then moved to Jalan Besar and temporarily ceased operations from 2016 to 2019, before reopening at its current location at 30 Foch Road.
According to Jumbo, it is continually exploring opportunities to expand its brands and concepts to strengthen its foothold in the local F&B industry.
“The food and culture of the hawkers is a deeply embedded aspect in the lives of all Singaporeans. Supporting and having an interest in a day-to-day staple food concept will accelerate Jumbo’s breakthrough into the local mass segment, ”Jumbo said.
He added that this proposed acquisition will allow Jumbo to diversify its revenue streams instead of focusing only on its existing full-service restaurants.
“Jumbo is cautiously optimistic about the future prospects for Kok Kee and the company, as it primarily caters to the local mass market, well suited for a fast-rotating on-site or take-out dinner,” noted the society.
Featured Image Credit: Jumbo Group / Miss Tam Chiak
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