Tech gadgets retailer Upson kicks off P1.65B IPO

MANILA, Philippines  – Upson International Corp., the country’s biggest retailer of computers and IT equipment, kicked off its P1.65-billion initial public offering on Tuesday.

The operator of mall-based shops such as Octagon Computer Superstore, Micro Valley, and Gadget King indicated in its final prospectus the offer period will run from March 21 through March 27.

It plans to make its Philippine Stock Exchange trading debut on April 3 under the symbol “UPSON”.

The company, among those that delayed their IPOs in 2022 due to volatile market conditions, earlier priced the offer at P2.40 per share, which was below the previous indicative maximum offer price of P5.50 per share.

It also reduced the number of offer shares by 30 percent.

Based on the final prospectus, the company said it would allocate all of the P1.5 billion IPO proceeds to expand its store network from 2023 to 2027.

Upson previously planned to raise as much as P4.32 billion for the same purpose and for general spending, which includes funds for store inventory.

In its final prospects, Upson also maintained a target to more than double its network by opening another 250 stores, or an additional retail space of 25,000 square meters, by 2027. It had 200 outlets as of September last year.

“The expansion can and may also be financed by other fund sources such as internally-generated funds and/or borrowings,” Upson said in the prospectus.

It also pans to build nine new warehouses and distribution facilities, which will be located in Manila, Cabanatuan, Dagupan, Naga, Iloilo, Bacolod, General Santos, Zamboanga and Palawan.

Upson had secured locations in Cabanatuan, Naga, Dagupan and Manila, the prospectus showed.

The IPO will also involve the sale of up to 62.5 million shares worth P150 million owned by company chair Lawrence Lee. This would also be used for price stablization activities during the post-IPO period.

The company was founded by entrepreneurs Ricardo Lee and William Lim as personal computers became an accessible consumer product in the 1990s.

Upson is selling as much as 22 percent of its shares to the public. It will have a market value of P7.5 billion, based on the IPO price.

The company booked a net income during the first nine months of 2022 jumped over 68 percent to P400.23 million while sales were up over 10 percent to P7.03 billion.

It tapped First Metro Investment Corp. as the issue manager and bookrunner for the transaction. It will be joined by RCBC Capital Corp. as joint lead underwriter.

READ MORE:

As wild swings rile stock market, computer retailer downsizes IPO