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Businessman Alfredo Yao-led Macay Holdings Inc. is globalizing its soft drinks business with a $47-million deal to fully acquire the British Virgin Islands-based company that owns multinational rights to produce and license RC Cola beverages outside the United States.
On Wednesday, the listed company said its board of directors had approved the acquisition of RC Global Beverages Inc. (RCGBI). The deal includes Macay paying $21 million in equity value and assuming $26 million worth of obligation to acquire 100 percent of RCGBI, bringing the total enterprise value of the deal to $47 million.
Macay agreed to buy RCGBI from Mazy’s Capital Inc., its majority shareholder. This means that Yao’s group had earlier acquired the overseas RC Cola business and is now folding it into Macay.
Various opportunities
There may be purchase price adjustment subject to RCGBI’s net earnings this year, the disclosure said.
“Macay Holdings has been in the last few years looking at various opportunities in the food and beverage sector to expand our portfolio, and pursue growth opportunities in this space … This acquisition allows us to expand geographically and provide diversification and increased opportunities,” Macay president Antonio Panajon said.
RCGBI, which has unaudited assets valued at $56 million, has the capacity to grant bottling and distribution licenses to companies in Asia, Europe, Africa, Middle East and in North and South America. It has nine brands under its portfolio.
“The RC Cola brand is an iconic 117-year-old brand and will allow Macay to establish cross border relationships with different F&B (food and beverage) companies in other countries, potentially leading to substantial opportunities in our current product offerings and offshore partnerships,” Panajon added.
International footprint
RCGBI currently has partnerships with 32 bottlers across 49 countries, including the Philippines.
“We think that the transaction is likely long-term value accretive to Macay given synergies it stands to realize, such as access to RCGBI’s value chain network,” China Bank Securities research director Rastine Mackie Mercado told the Inquirer.
He said that Macay’s shares might “see sharp movements and elevated volumes as investors price-in this development.”
Regina Capital Development Corp. head of sales Luis Limlingan added that the “buyout could prompt Macay to further expand their international footprint and widen their portfolio.”
AlphaPrimus Advisors served as financial advisor while Picazo Buyco Tan Fider & Santos acted as legal counsel for Macay. INQ