KUALA LUMPUR (Nov 26): Philippines' Universal Robina Corp (URC) is acquiring Munchy Food Industries for RM1.925 billion (or approximately 22.9 billion Php) on a cash-free and debt-free basis, to scale up its existing business in Malaysia and further increase its presence across the ASEAN region, while also improving overall profitability.
URC via its subsidiary URC Snack Foods (Malaysia) Sdn Bhd (URC MY) entered into an agreement on Thursday (Nov 25) to acquire 100% equity interest in Crunchy Foods Sdn Bhd (CFSB) — which fully owns Munchy Food Industries Sdn Bhd (MFI) and its subsidiary Munchworld Marketing Sdn Bhd (MWM) — from private equity firm Crunchy Ltd.
Crunchy Ltd is an investment holding company directly and indirectly controlled by funds managed by CVC Capital Partners, according to the Philippine snacks and beverage firm in a disclosure.
URC noted that the selling price per share is approximately RM2.81, and there is no expected capital expenditure (capex) investment to be made yet until recoveries from Covid-19 can be assessed.
“URC MY conducted an internal due diligence process and commissioned third-party advisers to analyse the target company on a strategic, operational, legal and financial basis.
“Purchase price has been assessed through Discounted Cash Flow method against internal hurdles required to achieve acceptable financial performance. The valuation considered the company’s post-Covid EBITDA (earnings before interest, taxes, depreciation and amortisation), generation capability, and its synergies with URC,” it explained.
URC added that the transaction will allow the group to become a market leader in Malaysia in the biscuit segment, which is consistent with URC's overall purpose.
“CFSB is also expected to enjoy some synergy in Malaysia with the local affiliate of URC, URC MY,” said the group.