Hotel operator Sunrise International Development Co (和昇休閒) has approved plans to acquire local restaurant chain Zoe International Group (展圓連鎖餐飲) to expand its economies of scale and diversify income sources, a senior executive said yesterday.
The two sides held several meetings before introducing the buyout plan to their board of directors on Thursday, which granted its approval.
The move came as the nation’s hospitality industry grows increasingly competitive, warranting business model adjustments, Sunrise’s hotel division chief Marco Su (蘇陳信) said.
“The acquisition would allow dining facilities at all Sunrise properties in Taiwan to benefit from Zoe International’s central kitchen system to better serve guests at lower costs,” Su said by telephone.
Sunrise, which also owns jewelry store Isabella Gold (伊莎貝拉金飾), operates 13 medium-sized resort hotels and inns in scenic areas in Taiwan and Japan. The hotelier plans to open three new outlets — in New Taipei City’s Pingsi District (平溪), Pingtung County’s Kenting (墾丁) and Japan — this year, Su added.
Zoe International is the owner of eight restaurant brands — including Azabu Sabo (麻布茶房), Cafe Kitchen (咖啡廚房), Irodori Sushi (鮨彩壽司), Perfume Dance (跳舞香水) and Gen Teishoku (元定食) — with more than 30 outlets, mostly in popular department stores.
Established in 1999, the restaurant operator reported an average annual revenue of NT$7 billion (US$225.42 million) over the past three years.
Su said Sunrise would buy only Zoe International’s brands and kitchen equipment.
The hotelier has set up a task force to undertake due diligence before the two sides can agree on the asset value and ink a deal, tentatively slated for May 15, he said.
“While the local hospitality market grows increasingly crowded, Sunrise is upbeat about double-digit revenue growth this year, as the economy is improving,” Su said.
The sharp decline in Chinese tourist numbers has had little impact on Sunrise, with local tourists accounting for 80 percent of its clientele, he said.
Sunrise chairman Yu Chieh-ming (禹介民) said it is time the nation’s hotels and restaurants pool their resources to craft a new business model and enhance profitability.
To finance expansions at home and in Japan, the hotelier in December last year announced plans to issue 11.5 million new common shares in the hope of raising NT$115 million to increase its capital from the current NT$520 million, it said in an earlier filing with the Taiwan Stock Exchange.
The new shares are set at NT$10.50 each, on par with the company’s net worth, it said.
The quick expansion has yet to pay off as Sunrise incurred losses of NT$52.1 million in the first half of last year, following losses of NT$83.44 million in 2015, stock exchange data showed.
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