UNIVERSAL Robina Corp. (URC) is partnering with Europe’s Intersnack Group in a bid to expand its operations in the Oceania snack food market.
In a disclosure to the stock exchange Monday, the Gokongwei-led firm said the board of directors of its wholly owned unit, URC Oceania Company Ltd., has approved Intersnack’s acquisition of a 40% stake in its consolidated business in Australia and New Zealand.
URC Oceania will be paid with a mix of cash and shares in Intersnack’s natural snack food unit in Australia, Yarra Valley Snack Foods Pty. Ltd.
The listed food and beverage firm sees the transaction as a way to monetize some of the synergies it has through its early investments in Australia and New Zealand, while still retaining control and the ability to “further create value within and beyond Australia and New Zealand.”
“Leveraging on URC and Intersnack’s know-how from their respective markets will yield best practices in manufacturing, supply chain and sustainability practices, setting the groundwork for an even larger and more efficient Oceania operations,” URC said in its disclosure.
Founded in 2008, the Intersnack Group produces food products such as potato and tortilla chips, popcorn and nuts, puffed corn snacks, and baked goods. The privately owned firm operates in 24 countries and has about $3 billion or P158.6 billion in net sales across Europe.
Intersnack’s unit, Yarra Valley, is currently its only presence in Australia, which is described as a market leader in organic and gluten-free snacks. Its brands include Chio, Vico, Monster Munch, Pennstate, Kelly’s, Taffel, and McCoy’s, among others.
Both parties expect to close the deal once it secures the necessary approvals from the Australian Foreign Investment Review Board and New Zealand Overseas Investment Office.
URC’s net income attributable to the parent went up three percent to P3.04 billion in the first quarter of 2019, driven by a seven percent uptick in net sales to P33.3 billion.
The company is tracking a seven to nine percent increase in sales this year, banking on the recovery of its instant coffee business. Meanwhile, its bottom line is expected to grow at the same pace as revenues.
To support its growth, URC has committed to spend P9.1 billion in capital expenditures for the year, mostly for capacity expansion. This includes P1 billion for its Davao flour mill’s expansion to 900 tons from its current 300 tons.
Shares in URC jumped 1.14% or P2 to close at P178 each at the stock exchange on Monday. — Arra B. Francia