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Wednesday, April 9, 2014

Century Pacific Food, Inc. (CNPF) IPO

* Trading symbol = CNPF
* Maximum offer price = P14.5 per share
* The offer period will run from April 23 to 29.
* The final offer price will be set on April 21.
* Listing date = May 6.
* Century Pacific Food Inc. of the Po family is raising P3.3 billion from the sale of 229.65 million shares, giving the food manufacturer a market capitalization of P32.33 billion after the share sale at maximum offer price.
* The offer shares represent 10.30% of the company's outstanding capital stock.
* Proceeds from the public offering will be used for debt payment, capital expenditures and for potential acquisitions.

CNPF traces its history from the Century Group, a leading branded food company primarily engaged in the development, processing, marketing and distribution of processed fish and meat, as well as processed dairy products in the Philippines.

In October 2013, the Century Group began to undertake a general corporate reorganization transaction. Prior to the corporate restructuring, the company’s businesses were operated by different companies:

Century Canning Corporation (“CCC”) incorporated on December 12, 1978 handled the Group’s sales and distribution for canned and processed tuna, sardines and bangus. Products are marketed under 555 for sardines, Century Tuna and 555 for tuna. Columbus Seafood Corporation (“CSC”), incorporated on December 20, 1994, operated the manufacturing plant for the sardines. General Tuna Corporation (“GTC”), incorporated on March 10, 1997, operated the tuna processing both for local and export sales.

The Pacific Meat Company, Inc. (“PMCI”), incorporated on June 28, 1994, manufactured canned and frozen processed meat under the brand names Argentina, Swift and 555.

Snow Mountain Dairy Corporation (“SMDC”), incorporated on February 14, 2001, handles the dairy and sinigang mixes under the brands of Birch Tree, Angel, Home Pride and Kaffe de Oro.

In order to streamline and rationalize the Group’s operations, the business operations of CCC, CSC and PMCI were folded into CNPF, the listing vehicle. The business operations of CCC and CSC were folded into CNPF under the canned and processed fish segment. The canned meat business operations of PMCI were folded into CNPF under the canned meat segment. SMDC, handling the dairy and mixes segment, and GTC, handling the private label canned, pouched and frozen tuna products for export, were retained as separate corporate entities as wholly-owned subsidiaries of CNPF.As a result, the pro forma financial statements of CNPF are a product of the combination of the businesses of CCC, PMCI, CSC, GTC and SMDC.

With this operating history spanning the last 35 years, CNPF has established a strong brand and product portfolio through, and supported by, continuous product innovation and acquisition of brands from third parties. Its brands are well-recognized in the Philippines and include 555 for sardines, Century Tuna and 555 for tuna, Argentina and Swift for canned meats and Angel and Birch Tree for canned and powdered milk. CNPF was the largest producer of canned foods in the Philippines in terms of retail value according to Euromonitor data for February 2013. The quality of CNPF’s products has been recognized by numerous consumer and industry association awards. For example, Century Tuna received the Trusted Brand Award from Reader’s Digest in 2011, 2012 and 2013 and Argentina Corned Beef received the same award in 2012 and 2013. As of December 31, 2013, CNPF offered 283 products which can be found in 3,772 modern retail outlets, approximately 225,168 directly served general trade outlets and 330,749 indirectly served points of sale, totaling over 559,689 points of sale throughout the Philippines.

CNPF operates five production facilities and distributes its products through 14 distribution centers strategically located across the Philippines. CNPF distributes its products directly to retailers, as well as through third-party distributors. As at December 31, 2013, CNPF maintained 200 manufacturer direct-to-retail accounts reaching 3,772 retail outlets in the Philippines. In addition, as at December 31, 2013, CNPF held distribution agreements with 39 distributors, reaching approximately 225,168 retail outlets ranging from supermarkets to sari-sari stores. Furthermore, as of December 31, 2013, CNPF exports both private label and branded products, which are distributed across North America, Europe, Asia, Australia, and the Middle East.

For the year ended December 31, 2013, CNPF’s net revenue was ₱19,023 million. CNPF’s net profit after tax for the same period was ₱743.9 million.

CNPF’s business operations are divided into four main business segments: canned and processed fish, canned meat, dairy and mixes and tuna export.

The canned and processed fish segment produces a variety of tuna, sardine and other fish and seafood-based products. CNPF’s key brands in the canned and processed fish segment include Century Tuna, 555, Blue Bay and Fresca.

The canned meat segment produces corned beef, meatloaf and a variety of other meat-based products. Key brands in this segment include Argentina, Wow and Swift.

The dairy and mixes segment primarily comprises canned milk, powdered milk and other dairy products, as well as coffee mixes and sinigang mix. Key brands include Angel, Birch Tree, Kaffe de Oro and Home Pride.

CNPF also produces private label canned, pouched and frozen tuna products for export to major overseas markets including North America, Europe, Asia, Australia, and the Middle East. In addition, CNPF’s branded products are also exported to overseas markets and are distributed across North America, Europe, Asia, Australia, and the Middle East.

Source: PSE Stocks

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