The Po family has sealed back-to-back deals to acquire 60-year-old sardine-maker Ligo and popular food kiosk chain operator Potato Corner, expanding the group’s food manufacturing and retailing empire.
Century Pacific Food Inc. (CNPF) expanded its shelf-stable mass-market consumer offering with the acquisition of Ligo from the Tung family, while leading restaurant chain Shakey’s Pizza Asia Ventures Inc. bagged Potato Corner, which has more than 1,000 outlets nationwide and a growing international footprint.
Shares of Shakey’s, which trades on the Philippine Stock Exchange under the ticker PIZZA, advanced by 8.9 percent while CNPF gained 1.8 percent when the buyout deals were disclosed on Friday.
These acquisitions have been approved by the boards of each company on Thursday night, but the price tags will be determined at a later date.
“Po family’s takeover of Ligo will add value to CNPF’s portfolio considering Ligo is a market leader in the country and has a long-standing business in the sardines category. It will be highly synergistic with Ligo’s product lineup composed of shelf-stable marine products,” said Luis Gerardo Limlingan, managing director at local stock brokerage Regina Capital Development.
“In addition, the acquisition of Potato Corner will help boost PIZZA’s 2022 strategy to actively pursue store openings amid the country’s economic reopening. Potato Corner is one of the most established local food kiosk chains not only domestically but also globally with its fast-growing franchisees particularly in the United States, Thailand and Indonesia,” he added.
Intellectual property
Shakey’s will take over the assets and intellectual property of Potato Corner, own and operate all company-owned stores and serve as brand owner and franchisor of stores being operated by franchisees. This kiosk chain operator is popular for its freshly-cooked flavored potato fries.
“Potato Corner is a bankable addition to PIZZA’s roster of ‘wow’ brands. Its co-founder, Jose Magsaysay, has truly established a solid brand foundation with a product that universally resonates with consumers. The current scale of Potato Corner and the brand love that it receives from consumers are a testament to that,” said Vicente Gregorio, president and chief executive officer of Shakey’s.
“This is an accretive acquisition. Nonetheless, we will pursue maximizing synergies and wielding our expertise in business development, franchise management, and supply chain operations to further grow the brand sustainably,” he added.
Christopher Po, Shakey’s chair, said the acquisition of Potato Corner would allow the group to cultivate entrepreneurship as one of its advocacies. “Potato Corner has over 600 MSME (micro, small and medium enterprise) franchisees. We intend to work closely with them toward making their business successful. As we grow Potato Corner’s business, the more we promote entrepreneurship,” he explained.
Brand equity
Since its inception in 1992, Potato Corner has built a “strong brand equity and demonstrated robust performance, attractive margins, and the capability to scale”—all aligned with its criteria for acquisitions, the disclosure said.
Like most food service businesses in the country, Potato Corner has taken a blow during the prolonged pandemic but demonstrated resilience and still emerged with profitable returns, the disclosure added.
CNPF will also purchase assets and intellectual property related to the manufacturing business of Ligo, a market leader in key regions in the Philippines.
“Ligo is a leading brand in the sardine category. Ligo will be highly synergistic with the rest of our shelf stable marine products. We are deeply humbled that the Tung family has entrusted this brand to our company, and we shall do our utmost to honor this legacy brand and continue its heritage,” Po said.
“This will be an accretive, bolt-on acquisition. We foresee synergies in selling and distribution, supply chain and marketing. Moreover, this acquisition is very aligned with our mission to provide affordable nutrition to our consumers. Our company has a long-standing business in the sardines category. We will be leveraging our scale and our experience to create more value for the brand, which will in turn strengthen our core business,” he added.
Canned sardines are among the top consumer staple products in the Philippines, being one of the most accessible protein and calcium sources for Filipino consumers. These are seen as essential products that support food security in the country.
CNPF is one of the largest manufacturers and exporters of marine products. It is home to household brands such as Century Tuna, 555, Blue Bay and Fresca. The company is also a market leader in meat and has a strong emerging business in dairy and coconuts.
This acquisition is part of CNPF’s portfolio build-up, whether through organic expansion or acquisition.
In early 2021, the company announced the acquisition of Pacific Meat Company, Inc., an emerging player in the large refrigerated food category.
It has also entered fast-growing categories such as plant-based alternatives and pet food through new brands, ‘unMEAT’ and ‘Goodest’, respectively. CNPF recently announced its expansion of its dairy business as well, launching a new brand ‘Choco Hero’ to compete in the choco malt segment.
CNPF expects to finish 2021 with a revenue growth of 10 to 15 percent and net income growth of close to 20 percent.