Del Monte Pacific nears $1.7-B purchase of US-based food business

MANILA, Philippines - Del Monte Pacific Ltd. (DMPL), controlled by the Campos family, has moved closer to acquiring the consumer food business of US-based Del Monte Foods for $1.7 billion.

“The board is pleased to announce that the company has received on Jan. 22 the in-principle approval from the Singapore Exchange Securities Trading Ltd. for the proposed acquisition,” DMPL said in a disclosure to the Philippine Stock Exchange.

The approval is subject to DMPL’s compliance with the the Singapore bourse’s listing requirement, shareholders’ approval being obtained for the proposed acquisition and several reports including written confirmations from the financial adviser.

In October, DMPL announced its acquisition of the consumer food business of Del Monte Foods for $1.675 billion. The move will give DMPL access to the profitable US and South American market while boosting its net sales by around $1.8 billion.

DMPL,listed both in the Singapore and Philippine bourses, earlier signed a bridge loan facility agreement with BDO Unibank Inc. for up to $350 million and a term loan facility deal with Bank of the Philippine Islands (BPI) for up to $165 million that will be guaranteed by parent firm NutriAsia Pacific Ltd.

DMPL, led by condiments king Joselito D. Campos Jr., will also raise $150 million through a share placement.

In January to September last year, DMPL posted a net income of $17.8 million, down five percent from a year ago due to non-recurring expenses such as transaction fees and dual listing in the Philippine Stock Exchange in June. Adding these back, net profit for the nine-month period would have been $20.7 million, or up 11 percent.

In the nine-month period, sales climbed 12 percent to $335.4 million from $300.2 million due to higher volume and better sales mix.

DMPL earlier said it will continue pursuing the sale of higher margin, value-added products as it implements operational efficiencies, procurement savings and active cost management.

DMPL’s 23,000-hectare plantation in Mindanao is the world’s largest fully integrated pineapple operation with a 750,000-metric ton processing capacity. It was set up in the 1920s due to the then widespread pineapple disease in Hawaii.

DMPL produces, markets and distributes food, beverages, and related products in the Asia Pacific region and the Indian subcontinent, and has supply deals with trademark owners and licensees around the world.

Its principal shareholder, NutriAsia, leads the Philippine market for condiments (Datu Puti and UFC), specialty sauces (Jufran and MangTomas) and cooking oil (Golden Fiesta).