URC acquires NZ snack food firm

MANILA, Philippines - Snacks and beverage giant Universal Robina Corp. (URC) of the Gokongwei family is taking over the leading biscuit and snack food company in New Zealand for NZ$700 million (roughly P26.4 billion), marking its largest acquisition to date.

The acquisition jumpstarts URC’s goal of becoming a major regional player while continuing the trend of Philippine firms buying established companies abroad.

In a regulatory filing, URC said its wholly owned offshore subsidiary URC International Co. Ltd. entered into an agreement to acquire 100 percent of NZ Snack Food Holdings Ltd. (NZFHL) from management and funds advised by Pacific Equity Partners.

“The transaction is valued at NZ$700 million and is subject to approval by New Zealand’s Overseas Investment Office,” URC said.

NZFHL is the holding company of Griffin’s Foods Ltd., New Zealand’s leading biscuit and snack food company with approximate net sales and earnings before interest, taxes, depreciation, and amortization of NZ$280 million and NZ$78 million, respectively.

“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,” said URC president and CEO Lance Gokongwei.

While URC has already built strong brands, the strategy is to continue offering existing consumers and markets in Southeast Asia and Greater China with innovative, convenient, lifestyle-focused and on-the-go products, Gokongwei added.

“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,” said Griffin’s executive chairman Ron Vela.

Bach Johann Sebastian, senior vice-president of URC’s parent firm JG Summit Holdings Inc., said in a text message that the transaction is URC’s largest acquisition to date.

URC International will fund the transaction through long-term debt financing and internal sources.

“The proposed acquisition is expected to transform Griffin’s international growth strategy as it will benefit from URC’s existing distribution networks across the Philippines and other Asian countries,” URC said.

Auckland-based Griffin’s enjoys a growing presence in Australia and it has a strong platform for Asian expansion.

“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 said.

Given its 150-year heritage, Griffin’s has developed a portfolio of high-quality branded products including biscuits, crackers, nutritious snack bars and savoury snacks

It is the company behind biscuit brands Gingernuts, Toffee Pops and MallowPuffs, and Huntley & Palmers crackers and savoury snacks under the Eta brand.

“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,” Gokongwei said.

URC is one of the largest branded consumer food and beverage product companies in the Philippines with a market capitalization of $7.6 billion and a significant and growing presence in the Southeast Asian markets. It is the company behind leading brands such as Jack n’ Jill, Hunt’s, C2, Blend 45, Uno Feeds and Cream All.

The acquisition by URC, which implemented a trading suspension yesterday prior to a detailed disclosure of the transaction, comes on the heels of Philippine companies buying into foreign firms.

In May, Andrew Tan’s Emperador Inc. took over Whyte & Mackay, the spirits business of the world’s biggest premium drinks group Diageo Plc. For $724.24 million. Late last year, infrastructure conglomerate Metro Pacific Investments Corp. and Hong Kong-based parent firm First Pacific Co. Ltd. acquired a 24.9-percent stake in Thai tollroad operator Don Muang Tollway Public Co. Ltd for P5.8 billion.