Kimly’s wholly owned subsidiary Jin Wei Food Holdings has entered a deal to acquire a portfolio of 10 coffeeshop and industrial canteen units from third-party sellers for S$59 million, the Singapore-style coffeeshop operator said in a filing to SGX Tuesday.
The properties include four long-term leasehold coffeeshop units located in mature Housing and Development Board (HDB) public housing estates, Kimly said.
In addition, the portfolio includes three freehold industrial canteen units located in mature and populated industrial areas near residential areas and three short-term coffeeshop leases directly leased from HDB, the filing said. Kimly said it will acquire a 49 percent of the short-term leases by setting up a joint venture.
“The proposed acquisition is in line with Kimly’s strategy to expand its footprint in Singapore through the acquisition of more food outlets at strategic locations within mature and populated estates with established footfalls, across the island,” Kimly said. “This acquisition is also part of the group’s ongoing efforts to pursue long term direct ownership of properties where it operates and manages food outlets, so as to enhance shareholder value.”
The term sheet for the deal is non-binding, pending the outcome of due diligence, Kimly said, adding it would also commission valuations of the properties.
Kimly said it would finance the deal for the long-term leasehold coffeeshop units and freehold canteen units with cash of S$46.06 million, via internal resources and/or external financing, and with the issuance of 40 million new shares at S$0.25 each. That would mark a premium of 11.36 percent to the shares’ volume weighted average price of S$0.2245 on Monday, Kimly said.
In addition, the short-term coffeeshop leases will be financed with S$2.94 million in cash from internal resources, Kimly said.
The proposed acquisition, combined with three coffeeshops secured under HDB’s tender system in July, a coffeeshop acquisition in November and a new coffeeshop under a third-party brand, will boost the number of food outlets to 81 from the current 67, the filing said.