Shakey’s sold to Po family, Singapore firm

The PO family has teamed up with GIC Private Ltd., the sovereign wealth fund of Singapore, to acquire a controlling stake in the company that owns and operates the local Shakey’s pizza parlor chain in a deal that values the entire business at about P15 billion.

The transaction also includes Bakemasters Inc., a supplier of bakery products to Shakey’s and other food service customers, as well as the Philippine franchise for Project Pie, a US artisan pizza restaurant chain, the Po family’s Century Pacific Group Inc. (CPGI) announced yesterday.

Under the deal, a new entity to be owned by CPGI and GIC would acquire majority of the pizza business under the holding firm International Family Food Services Inc. (IFFSI) from the Prieto family, which will continue to hold a minority stake in the company.

The post-deal equity structure was not disclosed. However, one source privy to the transaction said the Po family was the lead investor but GIC would get at least a 20-percent interest in the local pizza business.

The transaction is seen to put CPGI and GIC in a strong position to benefit from the country’s fast-growing restaurant industry, in turn driven by rising consumer affluence.

“We are excited about this opportunity to invest in Shakey’s as we are believers in the potential of the continued growth of the Philippine middle class,” said Christopher Po, president of CPGI.

CPGI, holding company of the Po family, is the parent company of leading canned food producer Century Pacific Food Inc. (CNPF) whose brands include Century Tuna, Argentina Corned Beef, Swift Meats, 555 Sardines and Birch Tree Milk. CPGI also has interests in frozen processed meat manufacturing, restaurant operations and real estate development. The holding firm owns the exclusive local franchise for Yoshinoya, a renowned Japanese fast-food chain introduced in the Philippines in 2001.

“We are big believers in the power of the Shakey’s brand, which is one of those iconic names blessed with a strong management team and solid operational track record throughout its more than 40 years history in the country,” Po added.

Shakey’s Pizza was established in 1954 and has been recognized as the first franchise pizza chain in the United States. Its signature products include the world famous thin crust pizzas and highly popular chicken and mojos.

It has since expanded globally and currently holds market leading positions in the Philippines’ traditional full-service pizza chain and family-style casual dining categories. It had close to 170 stores all over the country as of end-2015, including 60 large stand-alone formats with high visibility on major roads.

On the other hand, Project Pie, which allows customers to make their own pizza, has 12 restaurants in the country.

The deal value was not disclosed due to confidentiality provisions but other industry sources estimated this at P15 billion based on a 100-percent enterprise valuation of IFFSI. Banking sources said about P10 billion was raised for the acquisition with Banco de Oro, Metropolitan Bank and Trust Co. and Security Bank participating in the funding exercise.

“I am confident that our selection process for a buyer has resulted in our finding a group that will fit with the company’s business, culture, and heritage. Though the acquisition will result in new owners, the iconic brand, inviting store layouts and trademark customer service will remain intact and continue to be key business priorities moving forward,” said IFFSI chair Leo Prieto Jr.

This is the second time the Po family has teamed up with GIC, which previously acquired from CPGI a 10-percent stake in Philippine-listed Century Pacific Food Inc. in May 2014.

The Prieto family was advised by Maybank ATR Kim Eng on the deal while Evercore acted as exclusive financial adviser to CPGI.

The Po family’s partner in the buy-in deal, GIC, is a leading global investment firm with more than $100 billion in assets under management. Established in 1981 to secure the financial future of Singapore by managing the city-state’s foreign reserves, GIC is deemed a “disciplined long-term” value investor with interests in a wide range of asset classes, including real estate, private equity, equities and fixed income.