The food and beverage company Jumbo Group reportedly intends to acquire a 75 percent stake in the popular Kok Kee Wanton Noodle dumpling noodle stand for S $ 2.1 million in cash and stock.
The acquisition comes after Jumbo reported a net loss of approximately S $ 8.2 million for the fiscal year ended September 30 last night (November 26) – this contrasts with its net income of S $ 11.7 million last year.
In addition, sales decreased 36.5 percent from S $ 153.6 million in the previous year to S $ 97.6 million, mainly due to the effects of Covid-19.
According to The Business Times, Jumbo will use its internal resources to pay 70 percent of the purchase price in cash.
The remaining 30 percent is covered by the allocation and issue of jumbo shares according to an agreed formula. The purchase price is paid in two lump sums.
First inorganic expansion of the Jumbo Group
When the acquisition is complete, Kok Kee's owner Leong Goh Lian will continue to hold the remaining 15 percent of the shares.
Jumbo Group, which owns a stall of F&B brands like Jumbo Seafood and Ng Ah Sio Bak Kut Teh, plans to expand Kok Kee's network locally.
It is also intended to introduce the “traditional local dish” of wanton mee off the coast of Singapore.
Kok Kee Wanton Noodle started out as a humble stand in Lavender Food Square in 1985.
Photo credit: Sen via HardwareZone
It later 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, the company is continuously looking for ways to expand its brands and concepts to strengthen its position in the local F&B industry.
“Hawker food and culture are an ingrained aspect of the life of all Singaporeans. Supporting and engaging in an everyday staple concept will accelerate Jumbo's breakthrough into the local mass market, ”said Jumbo.
This proposed acquisition will allow Jumbo to diversify its revenue stream rather than just focusing on its existing full-service restaurants.
"Jumbo is cautiously optimistic about the future prospects of Kok Kee and the business as it is primarily aimed at the local mass market and is good for a quick dine-in or take-away," said the company.
Selected image source: Jumbo Group / Miss Tam Chiak