Pancake closes deal to buy Yellow Cab

Restaurant chain operator Pancake House has closed an P800-million deal to take over Yellow Cab Pizza using funds from the Metrobank group.

In a disclosure to the Philippine Stock Exchange on Friday, Pancake House said the food retailer had consummated its purchase of 500,000 or 100 percent of the shares of Yellow Cab Foods Corp.

The company added that the purchase was funded by the P800-million note facility agreement with Metropolitan Bank and Trust Co., which acted as facility agent and paying agent.

Metrobank was also an initial noteholder while its investment house unit First Metro Investment Corp. was arranger and initial noteholder.

The acquisition effectively scaled up the Pancake group’s casual dining business and diversified its product line. It added 82 additional stores under the Yellow Cab brand, 69 of which are company-owned.

The deal is seen boosting consolidated system sales to over P4 billion by 2012, the first full year of integration.

The deal is seen bringing the group’s consolidated turnover to P3.7 billion and cash flow based on earnings before interest, taxes, depreciation and amortization (EBITDA) to P524 million for 2012, up by 10 to 13 percent from respective levels expected for this year.  The acquisition was priced at about 4.6 times Yellow Cab’s EBITDA.

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 “Kabisera” and “Chicken Rice.”

The group now has a network of around 270 stores serving around 400,000 regular customers.