Leading meat supplier to SM Markets seeks P4.5-b IPO
North Star Meat Merchants Inc., a leading frozen and fresh meat supplier, plans to raise up to P4.5 billion from an initial public offering in June.
North Star Meat said in a statement Tuesday it filed with the Securities and Exchange Commission an application to sell up to 392 million common shares, with an over-allotment option for another 58 million secondary common shares at P10 each.
The company plans to use the net proceeds from the offering to expand a cold storage facility in Bulacan and open another one in Cebu.
The expansion plan will increase the company’s maximum storage capacity to eight million kilos from 2.1 million kilos.
The company is also looking to expand its financial muscle to keep up with the growth of key retail partners SM Markets and Waltermart Group and prepare for future potential retail partners.
“With increasing demand for fresh and frozen protein, we are keen on accelerating the growth and reach of the company to consistently provide safe, quality and affordable meat for everyone” North Star founder and chief executive Anthony Ng said.
North Star recorded sales of P9.28 billion in 202 and achieved a compounded annual growth rate of 39.7 percent since 2019.
About 90 percent of its business are with SM supermarkets and affiliate stores including Alfamart and Savemore.
“North Star believes that it is well-positioned to take advantage of a young and growing meat consuming population. An increase in purchasing power translates into an increase in meat consumption per capita” Ng said.
BDO Capital & Investment Corp. was engaged as the sole issue manager and underwriter for the offering.
“We expect there would be strong interest for this IPO given North Star’s unique focus on the country’s meat sector and food security, its established and longstanding relationships with retail giants such as the SM group and its unmatched scale of operations,” BDO Capital president Eduardo Francisco said.