SMC unit completes buyout of biscuits firm

SAN MIGUEL Pure Foods Co. Inc. (Purefoods) said yesterday that it completed the acquisition of La Pacita, which makes biscuits and flour-based snacks, from owner Felicisimo Martinez & Co. Inc.

The San Miguel Corp. subsidiary said in a stock exchange filing that the transaction was completed on Feb. 1 and included all trademarks, formulations, recipes and “intangible properties.”

The deal was first announced following the signing of a so-called intellectual Property Rights Transfer Agreement with Felicisimo Martinez & Co. last Nov. 19, 2014. La Pacita, which has been in business for almost a century, is best known for its Supreme Flakes as well as butter and raisin cookies.

The transaction likewise highlighted the company’s intent to expand in the Philippines, apart from eyeing new markets in the region. Purefoods said in a stock exchange filing this year that it was considering the expansion of product lines as well as potential acquisitions in Vietnam, Malaysia and Thailand.

The company announced last year that profit in the nine months through September 2014 hit P2.7 billion, flat from the same period in 2013, as strong storms dented earnings.

Revenue was up 4 percent year-on-year to P74.4 billion in the nine-month period and was on track to breach P100 billion for the full year, Purefoods said in a statement.

Growth in revenue was driven primarily by its agro, milling and dairy businesses.

Purefoods noted that operating income grew by 18 percent year-on-year to P4.3 billion as favorable selling prices, lower wheat costs and improved availability of key raw materials resulted in better margins, tempering the adverse impact of the Manila port congestion and Typhoon “Glenda” on operations.

The agro and milling businesses—producer of BMEG Feeds, Magnolia chicken, Monterey meats and Baron and King flour—delivered a combined revenue growth of 7 percent on account of higher volumes and better selling prices.

Purefoods’ cashflow as measured by earnings before interest, taxes, depreciation and amortization (Ebitda) amounted to P6.2 billion for the nine-month period.