With nearly 2,600 stores across South Korea and a presence in Singapore, Busan-based Compose Coffee will become JFC’s largest brand by outlets and joins coffee chains The Coffee Bean & Tea Leaf and Highlands Coffee
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Compose Coffee is currently the fourth largest branded coffee chain in South Korea by outlets | Photo credit: Compose Coffee
Filipino foodservice group Jollibee Food Corporation (JFC) is set to grow its coffee chain portfolio through acquiring a controlling 70% stake in fast-growing South Korean coffee chain Compose Coffee for $238m.
The deal will provide JFC with a ‘gateway to unlocking the fast-growing international value coffee market in South Korea’, the Manila-based business said in a filing with the Philippine Stock Exchange.
“We believe that Compose Coffee is a compelling strategic fit for JFC and is on track to becoming the largest, fastest growing and leading value coffee player in South Korea,” said JFC Chairman Tony Tan Caktiong in a statement.
Hong Kong-based private equity firm Elevation Equity Partners Korea Limited will acquire 25% of Compose Coffee with JFC’s investments division Titan Dining II LP holding the remaining 5%. The total acquisition cost is $340m.
“Together with Elevation and Titan Fund II, we look forward to working with the Compose Coffee’s accomplished management team to further accelerate the company’s growth in existing and new markets and capture the significant whitespace in South Korea’s value coffee market,” Caktiong added.
Founded in Busan in 2014, Compose Coffee has achieved rapid outlet growth to reach 2,600 outlets across South Korea – the majority of which are in Seoul and Busan. The franchised chain also operates a single site in Singapore – currently its only international market.
Compose Coffee will be consolidated into JFC’s financial statements upon completion of the deal. The Manila-based foodservice group forecasts the agreement will add 2% to its revenues and 12% to its EBITDA this year, alongside a 34% increase to its global store count which currently comprises 6,886 outlets.
Value-focused Compose Coffee will also become JFC’s largest brand by outlets, ahead of its 1,676-store eponymous fast-food chain Jollibee.
The deal comes four months after JFC acquired a 10% stake in US automated coffee and tea concept Botrista Inc for $28m and supports the group’s goal of significantly growing its coffee and tea chains globally.
Alongside Jollibee, JFC’s fastest-growing brands are the coffee chains Highlands Coffee and The Coffee Bean & Tea Leaf (CBTL), which currently operate 782 and 1,165 stores respectively.
JFC acquired a 50% share in Vietnam’s Highlands Coffee in 2012 before taking a controlling 60% interest in 2017. The foodservice group purchased CBTL in July 2019 in a $350m deal.
Manila-based JFC also operates 319 Milksha stores across seven markets globally and opened the first Common Man Coffee Roasters (CMCR) in the Philippines in January 2024 as part of a joint venture agreement with Singapore-based Food Collective Pte. Ltd.
Compose Coffee is currently the fourth largest branded coffee chain in South Korea by outlets behind Ediya Coffee, Paris Baguette and Mega Coffee , which operate 3,800, 3,750 and 3,000 stores respectively.