Gokongwei buys New Zealand firm for P26.4B

Gokongwei-led Universal Robina Corp. has scaled up its Asia-Pacific footprint with the acquisition of Auckland-based Griffin’s Foods Ltd., New Zealand’s leading biscuit and snack food manufacturer, for about NZ$700 (P26.37 billion).

URC told the Philippine Stock Exchange Monday that it had agreed to acquire through a wholly-owned offshore subsidiary a 100-percent direct stake in NZ Snack Food Holdings Ltd., the holding company of Griffin’s Foods, from management and funds advised by Pacific Equity Partners.

Griffin’s was described as “iconic” and the No. 1 snack food company in New Zealand with the leading market share in biscuits, the second largest market share in salty snacks (ETA brand) and the leading share in wrapped snacks (Nice & Natural brand).

Headquartered in Auckland, Griffin’s is a 150-year-old company and has two world-class manufacturing facilities producing a variety of snack products.

It generates about NZ$280 million (P10.55 billion) in annual net sales and cash flow based on earnings before interest, taxes, depreciation and amortization of NZ$78 million (P2.94 billion).

The company is also a major player and supplier of retailer branded products under the same categories for major accounts in New Zealand and Australia and is fast expanding its exports business in Asia.

The proposed acquisition is seen transforming Griffin’s international growth strategy, as it will benefit from URC’s existing distribution networks across the Philippines and other Asian countries.

In addition, the acquisition complements URC’s product portfolio, leveraging its distribution strength to sell a premium range of products in its home and international markets.

URC president and chief executive officer Lance Gokongwei said, “In recent years, URC has been looking for opportunities to explore potential acquisitions and partnerships in line with our vision to be a significant regional player in snack foods and beverages.”

“While we have already built very strong brands, our strategy is to continue offering our existing consumers and markets in the Asean and Greater China regions with innovative, convenient, lifestyle-focused and on-the-go products. We believe Griffin’s is a natural strategic fit to our existing snack foods portfolio given its strong brand heritage in New Zealand—a country trusted worldwide in having high credibility when it comes to food quality, safety and authenticity,” he said in a statement.

The PSE, for its part, suspended trading on URC on Monday pending the submission on a comprehensive disclosure.

The local bourse invoked the rule on disclosure of substantial acquisitions and reverse takeovers of listed firms.

URC has agreed to pay an initial NZ$100 million and the balance will be paid upon completion, during which the final amount will be calculated.

URC International will fund the transaction from long-term debt financing and internal sources, the disclosure said.

The transaction will be completion once the parties obtain approval for the transfer of shares granted under the Overseas Investment Act 2005 (New Zealand) and the Overseas Investment Regulations 2005 (New Zealand).

“The global trend of snacking is fast transforming the sector and our plan is to continue offering our consumers in Asia new and exciting premium brands such as Griffin’s Biscuits, ETA Salty Snacks and Nice & Natural Wrapped Snacks,” Gokongwei said.

“We believe Griffin’s is at the forefront of global consumer trends in snacking, including: indulgence; a sense of play and excitement; using natural ingredients; ensuring traceability of source; and providing healthy alternatives. We are very excited to introduce and grow these brands in Asia,” he said.

Griffin’s Executive chair Ron Vela, said: “Like Griffin’s, URC is a leading branded food company that started as a small, family-owned business and has successfully expanded its markets offshore to become one of the largest food and beverage companies in the region with operations in Asean markets including the Philippines, Vietnam, Thailand, Indonesia, Malaysia, Singapore, Hong Kong and China.”

“The Griffin’s board believes URC’s significant experience in developing its own export markets makes it the ideal partner to take Griffin’s forward as it embarks on this next exciting stage of growth,” Vela added.

Griffin’s was founded by John Griffin in Nelson in 1864 and has always had a major presence in New Zealand. It also enjoys a growing branded presence in Australia. It currently sells its brands to more than 20 countries and URC intends to expand on these export opportunities.

In its statement, URC said it was attracted to the “high quality” of Griffin’s products and made a commitment to invest behind the local team to grow the business in New Zealand, Australia and Asia.