Universal Robina to take full control of overseas business division

Philippines-based snack food and beverage company Universal Robina (URC) is set to take complete control of its overseas business division URC International (URCI) by purchasing the 23% stake held by private equity firm International Horizons Investments for PHP7.2bn ($170m).

In a filing to the Philippine Stock Exchange, URC said that its board has approved the proposal to acquire the 23% stake in URCI.

In the disclosure URC said the acquisition of the shares will allow it to benefit from strong growth of its international operations and will therefore be accretive.

The deal, which is likely to be completed by September 2012, values URCI at PHP31.3bn ($740.82m) – about 15.5 times its projected earnings for the year 2013.

The transaction is likely to be funded by the company’s recent placement of its treasury shares – in June 2012, the company raised about PHP7.44bn ($176.09m) through a private sale of 120 million treasury shares at PHP62 ($1.46) per share.

Earlier in 2012, the company said it will invest PHP5.18bn ($122.60m) in capital expenditures this year, up from 14% in 2011, with the majority of it being set apart for strengthening its consumer food operations.

URCI produces consumer food products under Universal Robina brands in Indonesia, China, Hong Kong, Singapore, Malaysia, Thailand and Vietnam, and its revenues have increased from $84m in 2003 to $440m in 2011.

For the nine months ending June 2012, the company reported 6% increase in revenues to $350m, while earnings after income tax rose 29% to $36m, driven by improving margins and strong sales in Vietnam.

Universal Robina is a food division of JG Summit, a diversified conglomerate company in the Philippines with business interests in property development, air transportation, petrochemicals and financial services.