Singapore foodservice operator Kimly Group has entered into an agreement to acquire 75% of halal business Tenderfresh for 54 million Singapore dollars ($40.7 million) as it eyes its first regional revenues.
Kimly believes it can leverage on Tenderfresh’s wide network to make headway into Singapore’s halal food industry and use this growth as a springboard into Southeast Asia.
Singapore’s halal dining market was estimated by Muslim-friendly travel expert CrescentRating at $745 million in 2019.
Kimly’s ambition to expand regionally can be easily facilitated as Singapore’s halal mark managed by MUIS is recognised by Brunei, Indonesia, and Malaysia under their MABIMS halal standard harmonisation agreement.
Tenderfresh manages 14 food concepts and 41 outlets that sell a wide variety of cuisines from western to local. It operates a 25,000 square foot central kitchen that is certified by the Islamic Religious Council of Singapore (MUIS). The kitchen caters to around 140 brands and outlets.
The halal business earned a pre-tax profit of 11.8 million Singapore dollars in 2020, according to Kimly in a stock exchange filing on Tuesday (May 11).
Tenderfresh was founded in 1979 by Soh Chun King, Koh Siew Tin and Chew Kian Ho.
Post-acquisition, its business will be restructured and extended into Kimly’s food outlets in Singapore.
The foodservice major currently owns 83 food outlets, 137 food stalls, two Tonkinchi Japanese restaurants and seven Rive Gauche Patisserie shops. It made a net profit of 25.2 million Singapore dollars in 2020, up 25.4% from 2019, according to its most recent annual report.
Kimly sees its acquisition of Tenderfresh bringing in new revenue streams, from direct sales to customers through restaurants and coffeeshop food stalls to supermarket chains and other restaurant groups.
The company will pay 38 million Singapore dollars in cash for Tenderfresh. 16 million Singapore dollars will be covered through the issuance of around 51 million new shares in the company, and the remaining 4 million Singapore dollars will be paid in cash once Tenderfresh hits 9 million Singapore dollars in profit.
Kimly expects the proposed acquisition to complete within five months.
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