Cosco Capital acquires Office Warehouse

MANILA, Philippines - Cosco Capital Inc., the investment vehicle of  Lucio and Susan Co, is venturing into specialty retail with the purchase of homegrown Office Warehouse.

In a regulatory filing, the holding firm said it signed an agreement to acquire 100 percent of Office Warehouse Inc., a retailer of office and school products with 47 stores branches in Mega Manila.

“The acquisition of Office Warehouse is in line with Cosco Capital’s thrust to diversify into specialty retail business,” company president Leonardo Dayao said in a text message yesterday.

“We see this as complementary to our food retailers Puregold Supermarkets and S&R Membership Shopping,” Dayao said, adding that Office Warehouse is a growth avenue for the holding firm.

The 15-year-old Office Warehouse is a provider and partner consultant of small and medium enterprises for cost-efficient and value-adding office solutions.

It offers office and school supplies, furniture and a wide range of technology products suited for office needs both in retail outlets and online shopping.

In May last year, Cosco Capital raised P16.8 billion worth of shares to fund the expansion of its retail, liquor and real estate businesses.

Of the proceeds, 50 percent was allotted to increase the selling area of Puregold-anchored commercial real estate properties and increase the oil and petroleum storage of Pure Petroleum.

Around 20 percent or more than P3 billion was allocated for the acquisition of non-food retail businesses like hardwares and pharmacies. Another 20 percent was set aside for debt payments and the remaining 10 percent to improve its distribution network.

The Co family last year injected into Cosco Capital, formerly Alcorn Gold Resources Corp., its 51-percent stake in the country’s second largest grocery chain Puregold and a portfolio of liquor distribution companies, commercial real estate firms and an oil storage business.

In January to September, 2013, Cosco Capital, net income more than doubled to P2.22 billion from the pro-forma P948 million a year ago. Its revenues jumped 35 percent to P54.4 billion from P40.25 billion year-on-year, primarily driven by retail chain Puregold Price Club Inc.