Pancake House signs deal to buy Yellow Cab for P800M

MANILA, Philippines—Restaurant chain operator Pancake House entered into a deal to acquire 100 percent of pizza chain Yellow Cab Foods Corp. for P800 million on Wednesday, beefing up its casual dining business.

The acquisition will bring to the Pancake House group 82 additional stores under the Yellow Cab brand, 69 of which are company owned.  The deal is seen boosting consolidated system sales to over the P4 billion-mark via a network of 270 stores.

“Yellow Cab is a top quality pizza chain that perfectly complements our other brands and is aligned with our strategic directions.  We view it as an established top of mind, premium pizza brand and a profitable business in its own short-term and sustainable growth over the medium to long term,” said Pancake House chair Martin Lorenzo.

The deal is seen bringing consolidated turnover to P3.7 billion and cash flow based on earnings before interest, taxes, depreciation and amortization to P524 million for 2012, up by 10-13 percent from levels expected this year.

The publicly listed Pancake House operates under the trade names “Pancake House,” “Dencio’s,” “Teriyaki Boy,” “Sizzlin’ Pepper Steak” and “Le Coeur de France.”  It also owns upstart restaurants “Kabisera” and “Chicken Rice.”

Pancake House will pay for the acquisition in cash.  The deal is expected to be closed in 30 days.