GOKONGWEI-led Universal Robina Corp. (URC) has signed a deal to acquire 100 percent of Consolidated Snacks Pty Ltd. (CPSL), one of the leading snackfoods company in Australia.
The acquisition, which will be done through URC International Co. Ltd., is worth AUD 600 million (P21.34 billion) in enterprise value but it will be done in a “cash-free, debt-free deal,” URC told the Philippine Stock Exchange on Wednesday.
CPSL trades under the company name Snackbrands Australia (SBA), the second largest player in salty snacks with a total market share of close to 30 percent and has a wide portfolio of chips including iconic brands like Kettles, Thins, CC’s and Cheezels. The company is also a preferred private label supplier and partner of the major Australian retailers.
“Cash-free, debt free (deal) means we are acquiring the target company and start with a clean balance sheet. The target company will retire all their debts and take all cash out upon completion,” said Mike Liwanag, URC vice president for investor relations.
The transaction has been approved by the board of directors of both companies and is expected to close by Sept. 30 subject to the approval of the Australian Foreign Investment Review Board and fulfilment of customary closing conditions.
With this acquisition, URC plans to create a wider footprint in Oceania with SBA providing a solid anchor in the highly competitive Australian fast-moving consumer good (FMCG) and retailing market. The new acquisition is also seen to unlock synergies with URC and Griffin’s, New Zealand’s number one snackfoods company which was acquired by URC in November 2014.
Lance Y. Gokongwei, URC chief executive officer, said: “URC in the past three years has started to look for strategic options on acquisitions or partnerships given the emerging competitive challenges being brought upon by the lifting of trade barriers and the attractiveness of the region where we operate. While we continue to push for innovation as an anchor to sustain our growth, the opportunity came at the right time to acquire a company like Snackbrands. Like URC, SBA is a leading organization with well known and loved brands, operationally efficient and driven by a strong management team.”
“I believe that both companies share the same vision and values and combining both will further unlock shareholder value in the years to come. The categories of both SB, URC and Griffins are fully complementary and will offer a wider range of on trend, on the go, ready to eat snacking categories namely biscuits, wrapped snacks and salty snacks. The addition of SBA into the URC organization will also further enhance the innovation capability of the total organization and reinforce our thrust on premiumization given emerging global consumer trends on indulgence, health, wellness and nutrition,” he said.