SBS Philippines Corp., a chemical trading firm which is diversifying into the property business, has signed a deal to acquire a five-hectare property with warehousing facilities used by beverage maker Coca-Cola in Calamba, Laguna, for P520 million.
Through subsidiary Lence Holdings Corp., SBS entered into a binding commitment with The Coca Cola Export Corp.—Philippine Branch and its related parties for the acquisition of warehouse facilities and property lot at Silangan Industrial Park in Barangay Mapagong, Calamba City.
The property includes ambient and cold storage facilities, machinery and other building improvements.
“The facility will be used in the warehousing and distribution operations of the corporation to serve as a key distribution center for regional market customers south of Metro Manila,” SBS said in a disclosure.
“Given that SBS customers are looking for savings, the south depot will allow greater opportunities for them to cut down on their logistics and sourcing organization, integrate the corporation’s procurement and logistic capabilities in their business processes, and promote collaborations for supply chain optimization to simplify their operations,” it said.
“This arrangement permits the corporation to grow and diversify its income streams,” it said.
The overall cost of the transaction is about P520 million subject to purchase price adjustments and inclusive of related transactions costs, applicable taxes and fees, the disclosure added.
Lence Holdings, the entity used to purchase the property, is a newly-incorporated holding company that is 65 percent owned by SBS, 25 percent by SBS’ wholly owned subsidiary SBS Holdings and Enterprises Corp. and 10 percent by the Sytengco family.
The transaction involves a combination of a stock purchase of Benesale Land Inc., the company owning the property, and an asset purchase of the buildings, improvements and machinery.
The PSE said the transaction was covered by its rules on substantial acquisitions and reverse takeovers.
From the time SBS listed on the PSE in August 2015, investors who were attracted to the company were betting on “undervalued” property asset play. The company owns property assets that have appreciated in value over the years. The company believes the business prospects of property investments have much potential given the robust growth of the property market and sees such investment strategy to contribute materially to SBS’ earnings on a sustainable and long-term basis.
The diversification seeks to balance SBS’ business and curb some of the fluctuations in the chemical trading business while growing income streams.—DORIS DUMLAO-ABADILLA