Wilcon sets P5-P5.68 IPO price range

Wilcon president Lorraine Belo Cincochan, founder and chair William Belo and COO Rosemarie Ong at a press briefing on Wilcon’s IPO on March 10, 2017

Home improvement and construction supply retailer Wilcon Depot, the first company to debut on the local stock exchange this year, has set the indicative price range for its initial public offering at P5 to P5.68 per share.

This equity deal will allow the company to raise at least P6.97 billion to as much as P7.92 billion from the sale of shares to the public, proceeds from which will fund its expansion program for the next five years.

Wilcon plans to build a network of 65 stores across the country with a net selling space of around 530,000 square meters in the next five years, more than double the current footprint of about 250,000 square meters in its 37 stores, said Wilcon chair William Belo, who founded the company 40 years ago.

At present, Wilcon generates annual sales of about P55,000 to P60,000 from each square meter of selling space.

“We plan to solidify our presence in existing markets and expand our foothold in fast-growing cities outside of Metro Manila by putting up more stores in the next three to five years. We opened our first branch this year in Butuan last January,” Belo said.

“We plan to build about 28 more stores, seven of them to open this year in Bacolod, Cagayan de Oro, Tacloban, Silang, General Trias and other areas that have high growth potential,” he added.

The 28 new stores to be opened will be in the form of flagship Wilcon Depot, or large-scale stores carrying 90,000 to 200,000 stock keeping units (SKUs) and catering to middle- and high-income individual homeowners and institutional accounts.

Wilcon intends to list on the PSE on March 31 under the ticker “WLCON” after an offering period to be conducted from March 20 to 24. This equity deal is expected to bring 34 percent of its shares to public hands.

The retailer was authorized to sell up to 1.393 billion primary shares, giving it a market capitalization of at least P20.5 billion to as much as P23.38 billion after the IPO. The final offering price will be announced on March 17.

First Metro Investment Corp. is the issue manager and bookrunner, and together with BDO Capital & Investment Corp., also acts as joint lead underwriter for the IPO. RCBC Capital Corp. is co-lead underwriter while Penta Capital Investment Corp. is a participating underwriter.

On the dividend policy, Wilcon commits to pay up to 25 percent of previous year’s earnings as dividend to shareholders.