Del Monte Pacific raises $74.5M from equity deal

By: Doris C. Dumlao - 11 years ago

MANILA, Philippines — Local food conglomerate Del Monte Pacific Ltd. (DMPL) has raised $74.5 million from the sale of equity in a newly incorporated subsidiary that will hold the consumer food business acquired from the US-based Del Monte Corp.

In a disclosure to the Philippine Stock Exchange on Wednesday, DMPL said it had sold new shares in DMPL Foods Ltd. to third party investors Ace Profit Enterprise Ltd. and Anatoli Holdings Co. Ltd., which are investing $37.25 million each in the newly formed subsidiary.

DMPL Foods will be the intermediate holding company for the acquisition of the consumer food business of Del Monte.

This equity deal is in line with DMPL’s plan to raise part of the funding for this big overseas acquisition from equity. DMPL is raising funds for its buyout of Del Monte’s consumer food business for $1.675 billion, a deal that allows the Filipino-owned food company to break into the US market and reunite with the iconic American mother brand. Some of the money for this buyout has been sourced from borrowings.

Ace and Anatoli were described in DMPL’s disclosure as “investment vehicles owned by parties who are independent third party investors.” DMPL Foods has entered into a subscription agreement with these two investors.

“The directors consider the investors as strategic investors since they are expected to provide linkages between their business networks in Asian markets and the consumer food business,” the disclosure said.

Listed on both the local and Singapore stock exchanges, DMPL owns the Del Monte brand for processed products in the Philippines where it enjoys leading market shares for canned pineapple juice and juice drinks, canned pineapple and tropical mixed fruits, tomato sauce, spaghetti sauce and tomato ketchup. The company also owns another premium brand, S&W, globally except in the Americas, Australia and New Zealand.

With a 23,000-hectare pineapple plantation in the Philippines, 700,000-ton processing capacity and a port beside the cannery, the group operates the world’s largest fully integrated pineapple operation. It is 67 percent-owned by NutriAsia Pacific Ltd, the market leader in the liquid condiments, specialty sauces and cooking oil market in the Philippines.