Food and plastic company could raise up to P4.6B in IPO

MANILA, Philippines—D&L Industries, a producer of ingredients and other inputs for food and plastic products, has set its initial public offering at a price of P4.30 per share, or at the middle of the indicative price range.

The offering was “oversubscribed,” a source privy to the equity deal said.  At the final pricing level, D&L can raise at least P4.6 billion while an additional P691.01 million worth of shares may be sold through an overallotment option.

The indicative price range was earlier set at between P3.85 and P4.80.

Stock brokerage DA Market Securities estimated that this offer price translated to a price to earnings ratio of 13  to 14 times the prospective earnings for 2012.

The offering will run from November 28 to December 5 and the listing of shares is targeted by Dec. 12.

D&L is authorized to sell up to 1.07 billion primary common shares but an overallotment of 160.7 million shares has  been set aside, which arranger Maybank ATRKim Eng Capital Partners may opt to take up at the offer price.

If the overallotment option is exercised, about 34 percent of D&L’s outstanding stock will be held by the public after the offering.  The option may be exercised within 30 days after the listing date.  Without the overallotment, 30 percent of its shares will be owned by the public.

Institutional investors are expected to take up up to 70 percent of the offering while 20 percent will be earmarked for PSE trading participants and 10 percent, for small investors.

Proceeds from the offering are intended for investments and acquisitions, for the payment of financial obligations as well as for general corporate purposes.

Through its operating units, D&L produces specialty product solutions for customers mostly in the food and plastic products businesses.

Via subsidiary Oleo-Fats, D&L manufactures a diverse line of specialty fats and oils, culinary and other specialty food ingredients as well as industrial fats and oils for leading food manufacturers and fast-food restaurant chains in the country. Oleo-Fats caters to most of the leading food manufacturers and quick-service restaurant chains in the Philippines such as Jollibee, McDonalds, Kentucky Fried Chicken, all of the major donut chains and food conglomerate Universal Robina Corp. It also produces food safety solutions such as cleaning and sanitation agents for various customers.

D&L also owns First in Colours and D&L Polymers & Colours, which produce a line of various products used in the manufacturing of plastic products, including pigment blends, color and additive masterbatches and engineered polymers for the local and offshore markets.

Another wholly owned subsidiary, Aero-Pack Industries, is the only manufacturer of customized aerosol products in the country and is a leading contract filler for various home and personal care product producers.