business

Farm Fresh mulls over "exciting" Inside Scoop-Jom Cha venture

KUALA LUMPUR: Farm Fresh Bhd, a distributor of dairy goods, is spending RM83.9 million to buy ice cream chain The Inside Scoop Sdn Bhd as part of its development into the food and beverage (F&B) industry.

Farm Fresh head of strategy and business development Eddie Lim said there would be a further brand collaboration between Jom Cha by Farm Fresh and Inside Scoop.

"We are considering the overall expansion plan for Farm Fresh and Jom Cha by Farm Fresh to become a more prominent player in the F&B industry. Overall, this will be an exciting adventure for Farm Fresh, Jom Cha, and Inside Scoop," he told the New Straits Times.

Farm Fresh Jomcha Sdn Bhd, a Farm Fresh subsidiary and the company in charge of the Jom Cha by Farm Fresh business, aims to establish 300 stores over the next three years.

Lim, who is the company's chief executive officer, said it planned to establish 100 stores this year and had already met eight per cent of that goal.

Jom Cha by Farm Fresh opened its first location in August 2022 at 1 Utama, Petaling Jaya and now has 25 locations. The latest Jom Cha by Farm Fresh kiosk opened at IOI City Mall Putrajaya on Wednesday (Feb 15).

The brand offers a range of interesting flavors starting from RM5.80.

"Our goal is to offer amazing flavours derived from high-quality ingredients at reasonable prices, as well as a greater product selection. Inside Scoop's arrival into our business will be complementing, "Lim said.

Meanwhile, Farm Fresh is acquiring a 65 per cent share in The Inside Scoop for RM83.9 million.

It is buying a 53 per cent stake from existing shareholders for RM68.4 million, and another 12 per cent of the enlarged issued The Inside Scoop shares for RM15.5 million.

In a stock exchange filing on Wednesday, Farm Fresh said the acquisition was aligned with its future ambitions and would pave the way to control "one of the fastest expanding artisanal ice creameries and largest home-grown ice-cream chain in Malaysia.

The transaction is expected to close in the second quarter of this year.

Farm Fresh entered into a share purchase agreement with The Inside Scoop's existing shareholders Edmund Tan Jun Hua (who held a 61 per cent interest before the proposal), Derrick Wu (37.9 per cent), and Harsh Rajpal (1.1 per cent).

The first RM48.4 million will be paid in cash, while the remaining RM20 million will be satisfied by the issuance of 13.16 million new Farm Fresh shares for RM1.52 per share.

Following that, Farm Fresh would enter into a share subscription arrangement with he Inside Scoop to buy 12 per cent of its expanded shares for RM15.5 million.

The Inside Scoop will become a 65 per cent-owned subsidiary of Farm Fresh, with Tan holding the remaining 35 per cent stake.

Farm Fresh stated that it would fund the transaction by repurposing the funds from its initial public offering.

This included RM55.15 million set aside for the expansion of its manufacturing facilities in Australia, as well as another RM8.76 million for the establishment of its new manufacturing hub, dairy farm and processing facility in Malaysia.

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