Well-known honey cake maker E.G-Sain (一之鄉) yesterday said that it plans to acquire a 91.59 percent share of local coffee shop chain Ikari Coffee (怡客咖啡) for NT$130 million (US$4.02 million).
“We also plan to acquire the remaining shares from other Ikari Coffee shareholders in the future,” E.G-Sain’s parent company, XPEC Entertainment Inc (樂陞科技), said in a filing with the Taiwan Stock Exchange.
The 41-year-old bakery was acquired by game developer XPEC Entertainment in January last year for NT$139 million.
If the deal, which is scheduled to close by the end of June, is completed, E.G-Sain said it would allow it to take over Ikari Coffee’s light food business and add at least NT$30 million in revenue every year.
E.G-Sain said the coffee chain operates 60 outlets in Taiwan and has been profitable since it started in 1994.
Over the past five years, Ikari’s annual revenue, excluding franchisee revenue, reached about NT$360 million, it said.
However, the coffee chain has reported investment losses in recent years, including a hot pot restaurant business.
Over the past two years, Ikari invested NT$50 million in a Taoyuan-based bakery named Memo Bakery (飴川本舖) and opened a hot pot restaurant called Memo (慢磨), resulting in losses of NT$5 million last year, according to the filing.
Ikari’s shareholders have been looking for new investors to take over the company after the company’s founder, Ho Fu-jen (何福仁), reported he was suffering from health issues in June last year.
E.G-Sain said the two sides have been engaged in talks over the past six months and finally reached a deal on Friday.
The deal is considered beneficial for both parties — E.G-Sain is expected to control the 60 coffee shops and its 20,000 active stored-value card members, while Ikari could stem its losses and become profitable by disposing of its small-scale hot pot businesses, E.G-Sain said.
“We are hoping to see sales of our classic honey cake and authorized gift boxes than double as more dessert counters are set up in new stores,” the company said in the filing.
After the acquisition is completed, E.G-Sun is to take full control of Ikari’s board and assign a general manager and chief financial officer, while the coffee chain’s original management and the interests of franchisees remain the same, it said.
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