HK$1 billion for Tam’s noodles? Japan’s Toridoll has the appetite
Toridoll, Japan’s biggest operator of noodle shops, wants to open 6,000 outlets around the world by 2025 and to be among the top 10 global restaurant brands
Toridoll Holdings Corp, Japan’s biggest operator of noodle shops and eateries, said it will buy control of the Hong Kong company that operates Tam’s Yunnan Rice Noodles (譚仔雲南米線) outlets in the city in a takeover valued at 15 billion yen (HK$1 billion).
The takeover of Jointed-Heart Catering Holdings would give Toridoll an important foothold to expand into mainland China, part of the Kobe-based company’s aim to open 6,000 stores around the world by 2025, company spokesman Shunsuke Fukabori said.
“The acquisition will help us accelerate expansion in the Hong Kong and Chinese mainland markets”, riding on the popularity of the TamJai brand of noodles, as the Yunnan noodles are called, Fukabori said in an interview with the South China Morning Post, without divulging the value of the takeover. Japan’s Nikkei estimated the price at 15 billion yen.
The acquisition, which will be signed on Tuesday, was scheduled for completion in February 2018, after which Tam’s would operate “as usual”, Fukabori said.
Toridoll, which has been listed since 2006, now operates 890 restaurants in Japan selling ramen, udon, yakitori and pasta, as well as 340 restaurants overseas.
The company, with a market capitalisation of 125 billion yen (US$1.1 billion) as of Monday, has been on a buying spree to spur its global expansion to be among the world’s top 10 restaurant brands within 10 years.
It opened its first teriyaki restaurant in the Kenyan capital of Nairobi in March 2015 and followed up early last year with an acquisition of Utara 5 Food and Beverage, which operates the Boat Noodle eateries in Malaysia.
Tam’s, established in the ’90s, is well known for its Yunnan-style rice noodles and expanded its business in recent years to 49 outlets in Hong Kong, including the core districts of Causeway Bay and Wan Chai.
The company has had close ties with Japan, having taken part in World Vision’s relief work to raise funds to aid Japan’s 2011 earthquake and tsunami victims. The founder’s son, Eric Tam Chun-pong, was there in person at Tam’s Mong Kok outlet to serve customers.
An acquisition of Tam’s was a reasonable step for Toridoll “as the spicy taste of Tam’s Yunnan noodles is very easily acceptable” in mainland China and Southeast Asia, said Victor Au, chief operating officer at Delta Asia Securities.
Still, it might be paying a premium price for its growth, Au said.
“The valuation of HK$1 billion is expensive compared with its competitors,” he said.
Ajisen (China) Holdings, which operates as many as 650 noodle restaurants in Hong Kong and mainland China, has a market value of HK$3.6 billion, about four times that of Tam’s but with 13 times the branch network.