Japan's Toridoll to buy Hong Kong noodle chain
Marugame udon shop operator eager to sell more bowls in mainland China
TOKYO -- Toridoll Holdings, operator of Japanese udon restaurant chain Marugame Seimen, plans to buy an entire stake of a Hong Kong-based noodle chain. It will likely pay some 15 billion yen ($132 million) for the deal, which will be the largest purchase ever for the Japanese company.
Such a large-scale takeover is rare in the restaurant industry, in which operators typically seek to expand overseas with their own brands.
The parties plan to finalize the acquisition amount and other details of the deal this week and conclude the deal sometime soon.
Jointed-Heart Catering Holdings runs about 50 shops in the territory under the Tam Chai Yunnan Noodles brand. For its most recent results, sales came to some 10 billion yen, making some 2 billion yen of earnings before interest, taxes, depreciation and amortization, or Ebitda.
A noodle bowl at the Tam Chai shop typically costs $4 or so. The biggest feature there is that customers can customize their bowl -- by choosing from a selection of bases including tomato base and simple clear soups, then adding a variety of toppings such as beef and leeks.
Through acquiring the popular rice noodle chain, Toridoll is keen to open more shops in Hong Kong, as well as expand into mainland China. The Japanese operator is already running some 60 Marugame Seimen shops in Shanghai and other mainland cities. Leveraging the popularity of the local noodle chain, the business will seek to increase its presence in the Chinese market.
Toridoll runs some 890 eateries in Japan and 340 overseas. Company President Takaya Awata has laid out a target of operating a total of 6,000 shops around the globe by the fiscal year through March 2025. To achieve that goal, enhancing overseas operations will be vital.