Aureos Capital to sell 21% stake in Pancake House

MANILA, Philippines—Aureos Capital Ltd. plans to sell its 21-percent stake in publicly listed casual dining chain Pancake House Ltd. as part of the unwinding of a fund invested in small- and medium-sized enterprises in emerging markets.

The stake is now valued at $11.58 million based on the market capitalization of Pancake House, more than double Aureos’ investment in the company. Aureos invested $4 million to acquire the 21 percent stake in 2005.

“..This divestment is in accordance with the expiration of the five-year life of the Aureos Capital Fund,” Pancake House said in a disclosure to the Philippine Stock Exchange.

Aureos’ investment in Pancake was then used to acquire a second brand—Teriyaki Boy.

As of Monday, Pancake House had a market capitalization of P2.37 billion based on its latest traded price of P10 per share.

Aureos Capital is a private equity fund management company specializing in investing in small- and medium-sized businesses in emerging markets. It typically generates deals with businesses that stand out—usually family-owned, with at least five to seven years of history, often a niche market leader and always with a good track record. The goal upon exit is not only to sustain growth but also to achieve a high valuation and minimal residual liability.

Early last year, the fund put in a $4-million investment in the Daniel O. Mercado Medical Center equivalent to a 33-percent stake. It also acquired a 35-percent stake in the Hortalezas’ personal care store chain HBC Inc. for about $7 million in 2011.