MEAT retailer North Star Meat Merchants, Inc. announced on Tuesday that it had filed a registration application with the Securities and Exchange Commission (SEC) for an initial public offering (IPO).
The market listing, subject to approval, will allow investors to acquire up to 25% of the company’s 1.8 billion outstanding shares after the offer. The shares will be offered at a price of up to P10 each, bringing the IPO size to P4.5 billion.
“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 in a statement.
“We remain steadfast in our commitment to support the country’s goal to achieve food self-sufficiency and security while creating value for our shareholders,” he added.
North Star plans to hold the offer period in June 2022 and expects to net approximately P3.5 billion from the sale of primary shares.
The IPO will include the offer and sale of up to 392 million common shares, consisting of 360 million primary shares and 32 million secondary shares, and an over-allotment option of up to 58 million secondary common shares that will be used for the price stabilization activities if the same will be undertaken.
In 2021, the company recorded P9.28 billion in sales, with a compound annual growth rate (CAGR) of 39.7% since 2019.
North Star said it was planning the IPO to “accelerate the expansion of its end-to-end cold chain infrastructure and operations.”
“In addition, [we are] looking to expand their financial muscle in order to keep up with the growth of their key retail partners SM Markets and WalterMart Group, and prepare for future potential retail partners,” it added.
The company tapped BDO Capital & Investment Corp. to be the sole issue manager, and with China Bank Capital Corp., will act as the joint lead underwriters and bookrunner.
“We expect there to 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 V. Francisco said.
North Star expanded its cold storage facility in Bulacan and opened a cold storage facility in Cebu, increasing its maximum storage capacity to 8 million kilos from 2.1 million kilos.
“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 to an increase in meat consumption per capita,” Mr. Ng said.
“Due to the pandemic, we believe that consumers have now become more health and safety conscious, affecting what they consume and where they purchase their food. North Star stands to benefit from this change in consumer behavior by being available in 360 supermarkets and 1,251 convenience stores nationwide,” he added.