Po family to acquire Ligo, Potato Corner

MANILA, Philippines (Update 2, December 27, 2021, 11:41 a.m.) — The Po family is making big business moves before the year ends as it is set to acquire top food brands Potato Corner and Ligo.

In separate disclosures to the Philippine Stock Exchange early Friday morning, Century Pacific Food, Inc. (CNPF) and Shakey's Pizza Asia Ventures, Inc (SPAVI), where the Po family is the majority owner, announced the acquisitions of these brands. Both deals came months after the death of the Po family's patriarch and CNPF founder, Ricardo Po, Sr.

In the purchase of Ligo, a household name for sardines, CNPF said the acquisition will involve CNPF purchasing assets and intellectual property related to Ligo's product manufacturing.

“We are deeply humbled that the Tung family has entrusted this brand to our company, and we shall do our utmost to honor this legacy brand and continue its heritage,” Christopher Po, company executive chairman, said.

Canned sardines are considered household staples in Filipino households, owing to their price and taste flexibility. For Ligo, it has existed in the Filipino marketplace for over 60 years and even made its mark in popular culture, courtesy of the Tung brothers, for their quips on the national government's response to the pandemic early on.

"This will be an accretive, bolt-on acquisition. We foresee synergies in selling and distribution, supply chain, and marketing," Po added.

Sought for comment, Francesca Acop, equity analyst for local brokerage Regina Capital, believes this would propel CNPF as top manufacturer in the canned sardines segment in the country.

"This would strengthen CNPF's core business as we can expect synergies in terms of selling and distribution, supply chain, and marketing," Acop said in a Viber message.

"Recall that in the third quarter of 2021, revenues from its branded segment sustained its growth due to the continuous demand for staples amid the pandemic," she added.

CNPF has been injecting brands left and right into its portfolio throughout 2021, purchasing refrigerated food producer Pacific Meat Company Inc. and introducing pet food brand Goodest, plant-based alternatives unMEAT and chocolate malt drink brand Choco Hero.

Potato Corner deal

On the other hand, SPAVI — which the Po family shares ownership with the Prieto family, Arran Private Investments Ltd. and JE Holdings — is acquiring food kiosk brand Potato Corner in a bid to grow its franchising segment.

Under this asset purchase signed on December 24, SPAVI will acquire assets and intellectual property related to Potato Corner's business. SPAVI noted they will also take over ownership and operation of Potato Corner's stores, as well as domestic and international franchises.

The Potato Corner brand has over 1,000 stores in the Philippines with a "growing footprint in Asia and beyond," according to company statement. But much like businesses in the food and beverage industry in the past 21 months, the company endured losses from the pandemic due to mobility restrictions that reduced foot traffic from commuters who are big buyers of the brand's famous french fries.

Po, also chairman of SPAVI, said this deal would bring them closer to micro, small, and medium enterprises, adding that Potato Corner is a "top choice" for budding entrepreneurs as the food kiosk brand has over 600 franchises run by MSMEs in its slate.

"We intend to work closely with them towards making their business successful. As we grow Potato Corner’s business, the more we promote entrepreneurship," he said.

SPAVI, traded under the ticker PIZZA in the local bourse, said the addition of Potato Corner in its portfolio will boost Shakey's "reopening play" in the coming year, noting that Potato Corner's presence in more than 10 countries will diversify its operations and revenue streams.

Regina Capital’s Acop said the acquisition is a bankable addition to SPAVI’s brand portfolio. The pizza company is pursuing aggressive store network expansion, opening 30 new stores in 2021.

"The brand would make up for PIZZA's relatively low footprint internationally. The acquisition is aligned with PIZZA's aggressive expansion plan since it formed the subsidiary, WOW Brand Holdings Inc. to acquire food businesses in the country," she said.

Editor's note: Paragraph 11 of this story has been amended to clarify the ownership of SPAVI.