Anyone care for some self-service frozen yoghurt?
SMTrack, formerly filed as Smartag Solution with Bursa Malaysia, will be acquiring 100 per cent of Wellspring Worldwide, the master franchisor for US-based frozen yoghurt chain, Tutti Frutti.
The proposed deal will close at RM310 million (USD72.4 million), which includes issuance of new shares, divide of gross proceeds and cash payment. The acquisition will also see SMTrack owning the master franchise rights to O’My Buns, a specialty bakery best known for its coffee-infused glaze.
Discussions started back in August 2016, which boosted the shares of SMTrack by 16 per cent when it was announced. During the same period, Wellspring Worldwide and SMTrack entered into an memorandum of understanding (MoU) to etch out the details of the acquisition.
This acquisition will be the first for RFID-type (radio frequency identification) business SMTrack, which has been making a loss in recent years. Wellspring Worldwide, a global supply and distribution channel for food products, has been responsible for opening over 250 Tutti Frutti outlets in the United States and more than 290 stores internationally.
In 2009, Malaysia’s Naza Group brought the franchise into Southeast Asia with entrants into markets like Singapore, Thailand, Cambodia, and Brunei. In Malaysia, there are more than 100 Tutti Frutti outlets.
The transaction will see Wellspring Worldwide receiving two years of profit after tax in the financial year ending December 2018 and 2019, including a new set up of regional offices in Europe and the Middle East.
Both parties expect the transaction to complete by the first quarter of 2018.