Hoshizaki Corporation has acquired an established Chinese catering equipment dealer after signalling its desire to move into commercial kitchen design and fit-outs in that part of the world.
The Japanese manufacturer, renowned for its huge global refrigeration and ice machine business, has agreed to buy a 51% stake in Beijing Royalkitchen Science and Technology worth a reported $17m.
Royalkitchen was established more than 20 years ago and specialises in the design and installation of kitchens for luxury hotels and corporate workplaces and factories. It made revenues of around $19m last year.
The company enjoys a strong reputation in China and has recently focused on expanding into the multi-site restaurant, supermarket and convenience store channels, which Hoshizaki expects to increase its profitability.
In a statement, Hoshizaki said the acquisition would accelerate its expansion in a Chinese market that it regards as one of its top priorities and explained the rationale for buying a dealer business: “We used to focus on sales of commercial ice makers and refrigerators through dealer sales channels in the Chinese market. By acquiring Royalkitchen, we will expand our business to a new area [of] commercial kitchen design and construction,” it noted.
The takeover of Royalkitchen has been conducted through Hoshizaki China Holdings, a wholly-owned subsidiary of the Japanese manufacturer, and should be completed by November.
Although the prospect of manufacturers going after dealer businesses may cause some distributors to break out in a cold sweat, Hoshizaki is not the first to choose this path.
Back in 2017, Middleby Corporation surprised the market by snapping up US distributor QualServ Solutions, a $100m provider of kitchen design, project management and equipment solutions.
Middleby said at the time that the deal would expand its product offerings to include kitchen fabrication, and enable it to further expand the services it provides to its global restaurant chain customers.
Hoshizaki has promised to “invest aggressively” to become the global number one player in the foodservice industry, including M&A to expand existing businesses and enter new areas.
Earlier this month it finalised the takeover of Brema, the Italian manufacturer of commercial ice machines that are predominantly sold into Southern Europe and the Middle East.