In a bid to promote authentic local flavours and to deepen its presence in the local food and beverage (F&B) market, Jumbo has announced that it will be acquiring a 75% stake in Kok Kee Wanton Noodle for a total consideration of $2.1 million.
Kok Kee Wanton Noodle began as a wanton noodle stall at Lavender Food Square in 1985 before moving to Hoa Nam Building in Jalan Besar.
The business is known for its springy noodles and special lard-based sauce among Singaporeans.
The consideration will be payable in two lump sum tranches, and will be 70% or $735,000 paid in cash, financed by Jumbo’s internal resources. The remaining 30% or $315,000 will be paid via the allotment and issuance of a number of ordinary shares in the capital of Jumbo based on an agreed formula.
Upon completion of the acquisition, Kok Kee will become an indirect subsidiary of Jumbo. The remaining 25% stake in Kok Kee will continue to be held by its owner Leong Goh Lian.
The acquisition marks the group’s first inorganic expansion since its listing in 2015. It is not expected to have any material effect on Jumbo’s net asset value and earnings for the financial year ending Sept 30, 2021.
On the acquisition, Jumbo says it provides diversification in terms of income streams. It adds that it is “cautiously optimistic” of Kok Kee’s future prospects due to its target audience and its suitability for fast turnover dine-in or takeaways.
In a Nov 26 statement, the group says it intends to expand Kok Kee’s network locally and to introduce this heritage local dish to geographies beyond Singapore.
“I am a fervent lover of local hawker food and I strongly believe Singapore has a unique food culture which should be conserved and propagated. In recent years, more pioneer generation of hawkers are closing shutters due to old age and lack of successors,” says Jumbo’s group CEO and executive director Ang Kiam Meng.
“Jumbo’s philosophy is to bond people through food, and advocates Singapore’s local taste and dining culture. This proposed accquisition is not only strategic to the Group’s business objectives, but also allows Jumbo to play our part as a Singapore enterprise to preserve and promote our Singapore heritage flavours and dishes,” he adds.
Shares in Jumbo closed flat at 32 cents on Nov 26.
