Koufu’s Latest Acquisition Promises to Bring in the Dough

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The group announced its first acquisition since its IPO — Deli Asia, a fried foods and dough provider, for S$22.04 million. YahooFinance

Koufu Group Ltd is an established operator and manager of food courts and coffee shops in Singapore. The company also has a presence in both Malaysia and Macau.As of 31 December 2019, Koufu’s outlet and mall management segment’s portfolio consists of 50 food courts, 16 coffee shops, a hawker centre, and a commercial mall in Singapore.

The group has minimal debt on its balance sheet and generated high levels of free cash flow in both the fiscal years 2018 and 2019. Deli Asia has approximately 60 franchised F&B stalls at food courts, coffee shops and hawker centres selling a variety of dough-related products under the Delisnacks brand.

The group has allocated around S$18.6 million of its IPO proceeds to the construction of its integrated facility, but the construction and completion have been delayed due to the COVID-19 pandemic.Going through a tough patchDue to the circuit breaker measures implemented in April and May, the group had to temporarily suspend the operations of 10 food courts, three quick-service restaurants and two full-service restaurants.

Two of the three existing shareholders of Deli Asia, Ms Irene Lee and Ms Doreen Ong, have signed a one-year service agreement to join Koufu as company advisors upon completion of the deal. By paying S$22 million, it acquired Deli Asia at a price-to-book multiple of around 3.1 times and price-to-earnings multiple of roughly nine times.

 

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