Latest Updates Archives - North Star Meat Merchants Inc.

As promised, here’s a closer look at North Star Meat Merchants' [NSTAR 10.00 pre-SEC] preliminary prospectus that it submitted to the SEC as part of its application for a July IPO. NSTAR is owned by Anthony Ng, who created the company as part of his “Entrepreneurial Management” thesis at UAAP in 1999. The company describes itself as the “largest pork and beef vendor in Modern Trade Channels in the Philippines.” Modern Trade is an industry term for chain-owned grocery stores of all sizes, from mini-marts to hyper-marts.

The IPO deal: The NSTAR IPO offer consists of 450 million common shares, at a tentative price of P10.00/share, to raise P4.5 billion. NSTAR itself will sell 360 million primary shares, and a major shareholder (Golden MJTF Holdings, owned by NSTAR’s vice chairman) will sell 90 million shares (32 million as part of the basic IPO offer, and an additional 58 million as part of the over-allotment option). After the IPO, the public will own 25% of NSTAR, assuming full exercise of the over-allotment option. The company is aiming to list in the middle of this year on the main board. BDO Capital is the issue manager. There will be a stabilization fund.

Primary/secondary split: Only about 8% of the basic IPO offer (called the “firm offer”) is secondary, meaning that the money raised by selling those secondary shares will go to the selling shareholder (Miguel Tan, through Golden MJTF Holdings). The remainder of the firm offer is all primary, meaning that the money raised will go directly to NSTAR itself to grow its business. The firm offer excludes the over-allotment option, which is made up of secondary shares, so when we include this in the calculation, the total split jumps to 20% secondary. That’s still very reasonable. This is not a cash-out transaction like we saw with Virgilio Villar’s Medilines Distributors [MEDIC 0.86 1.18%], where 32% of the IPO was secondary (cash directly to Virgilio Villar), and none of those secondary shares were sold as part of an over-allotment option stabilization fund. It was all just “straight to pocket’ without giving investors any benefit. Still, 20% is not nothing, but at least the majority of the secondary shares are going toward a stabilization fund that will help IPO investors in the first month.

Use of proceeds: NSTAR will receive approximately P3.48 billion in proceeds from the IPO. Remember, NSTAR doesn’t get any money for secondary share sales, and any proceeds that NSTAR can apply to cool new things have to be “net” of the fees incurred by NSTAR to banks and the PSE for conducting its IPO. NSTAR will put P2 billion towards “working capital”, which it plans to use to increase its contract-buying of meat products to lower its average unit price. It plans to spend P1 billion on capex to expand its cold chain infrastructure by building small- and medium-sized cold storage facilities in “underserved” locations, particularly in the provinces. It will use approximately P0.5 billion to expand its product lines. I like that “debt repayment” is not a huge component of this transaction, which is unusual considering the capex-heavy nature of NSTAR’s cold chain business.

Leftover authorized capital: One interesting bit that I saw was that, in contemplation of the IPO, the directors of NSTAR voted to increase the company’s authorized capital stock to 2.5 billion shares. After the IPO is complete, there will be 1.8 billion shares outstanding, meaning that there will still be approximately 0.7 billion shares of unused authorized capital stock that NSTAR could use for another round of fundraising. That’s an inventory of “sellable stock” that is nearly twice the size of its IPO firm offer. As we’ve discussed with Solar Philippines NEC [SPNEC 1.97 2.07%], the PSE rules demand there to be a 180-day grace period between the company’s IPO and any kind of subsequent equity raise, like a follow-on offering, stock rights offering, or private placement, so there’s no concern of any kind of immediate move, but potential investors just need to be aware of these kinds of situations.

MB BOTTOM-LINE

This is an intriguing offering.

NSTAR’s vision is to become the “cold chain infrastructure backbone of the country”, which is an audacious vision, but visions are supposed to be big and almost hilarious-sounding.

They have a large network of cold storage space, but almost all of it is for private use: this doesn’t appear to be a build-out plan that will help the agriculture industry directly through building cold storages in the provinces.

The build-out plan helps NSTAR by increasing storage capacity, decreasing fuel overhead by optimizing “truck miles”, and otherwise growing its footprint to better overlap with SM, its primary patron.

I know some people will probably consider NSTAR’s reliance on SM as its primary customer to be a point of risk, and that’s true; what happens to NSTAR if SM decides to “take its talents” elsewhere?

At the same time, the relationship that NSTAR has forged with SM is over 20 years old, and there’s great value and efficiency in having one or two large customers that pay well and pay on time, as opposed to chasing several hundred smaller clients for payments.

Some might also point out that NSTAR’s business type is that of simple cold chain logistics: they aren’t doing anything especially challenging from a quality perspective, like pharma/vaccines, or challenging from a process perspective, like fast food.

And while that’s true, the “logistics” space is vast and encompasses so much.

Even logistics’ sub-category, cold chain, can mean anything from refrigerated delivery trucks to multi-hectare automated cold storages with multiple climate zones and on-site processing capabilities.

Our logistics and cold storage industries are still in their relative infancies, so there is a lot of room for everyone to grow. Will NSTAR be the cold chain backbone of the country because of this IPO?

Hard to say! But longtime MB readers will know that logistics and cold storages are part of my long-term thesis about the growth of the middle class in this country, so this, as they say, is “relevant to my interests”.

That doesn’t automatically make it a good opportunity; of course, individual due diligence is required. But this is our first shot at a dedicated cold chain logistics provider on the PSE, and I’m all about it.

MANILA, Philippines — North Star Meat Merchants Inc., one of the largest pork and beef vendors in the country, has filed with the Securities and Exchange Commission (SEC) a registration statement for an initial public offering of up to P4.5 billion.

North Star said it would offer up to 392 million common shares plus an over-allotment option of up to 58 million secondary common shares at a price of up to P10 each.

The company expects to raise roughly P3.5 billion to be used for capital expenditures to expand its cold chain infrastructure, increase working capital primarily to lower cost and to expand North Star’s product lines.

North Star plans to start the offering in June and expects to list before the end of the first half.

Company founder and CEO Anthony Ng is optimistic about North Star’s prospects for growth.

“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,” Ng said.

He said North Star is well-positioned to take advantage of a young and growing meat consuming population.

“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 1251 convenience stores nationwide,” Ng said.

North Star registered P9.28 billion in sales last year and has consistently grown with a CAGR of 39.7 percent since 2019.

Its products are available through its retail partners SM Markets and Waltermart Group.

As part of its expansion, North Star will continue to prepare for future potential retail partners.

For the IPO, the company tapped BDO Capital & Investment Corp. as the sole issue manager, and together with China Bank Capital Corp., will act as the joint lead underwriters and bookrunners for the IPO.

“We expect 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,” said BDO Capital president Eduardo Francisco.

He said that many investors would be surprised to note that they have actually been consuming North Star’s various fresh and frozen meat products when doing their grocery shopping or dining at certain restaurants and food establishments.

Philippine Airlines [PAL 6.05 suspended] [link] resubmitted its FY19 and FY20 financial statements, this time supported by an auditor’s unqualified opinion. PAL gets a passing grade on the accuracy of its financial statements, but the auditor still thinks that “material uncertainties exist that may cast significant doubt on the Group’s ability to continue as a going concern”. That’s one way of putting it. The PSE will lift PAL’s trading suspension on March 28.

Cebu Pacific [CEB 43.40 2.60%] [link] teases P24.5 billion FY21 net loss. That’s actually 10% worse than FY20, when it lost P22.2 billion. Passengers haven’t returned, many countries are wading through a new round of Omicron infection, fuel prices are through the roof... but despite that, CEB thinks it will get back to pre-COVID domestic capacity (not profitability, that’s important) by the end of June of this year. Ambitious? Feels ambitious. Let's watch and see. Worth looking at other jurisdictions to see if there are any models we can use to predict how this might progress for CEB.

North Star Meat Merchants [NSTAR 10.00 pre-SEC] [link] filed for a P4.5 billion IPO. Tentative offer period in June, with listing in July. The meat trader supplies product to SM markets and the Waltermart Group, and considers its competitive advantage to be its “end-to-end cold chain infrastructure.” I’m going to be watching this one closely, because this could be the first of the private cold storage companies to go public. Very interested to do a deeper dive on this in the future, once I get a look at the prospectus.

Globe [GLO 2408.00 0.84%] [link] plans to IPO its “shared services” provider subsidiary, Asticom, “within 5 years” to fund its portfolio expansion. Asticom provides staffing, platform, and logistics services for companies in the Ayala Family’s ecosystem. This one is interesting, I want to know more, but a lot can happen in 5 years. When I said I wanted GLO to IPO more of its subsidiaries, I was talking about the explosive-growth fintech one!

Synergy Grid [SGP 11.36 0.35%] [link] declares a P0.22/share dividend for Q1 of this year, up from P0.20/share that it declared in the same period last year. At SGP’s closing price of P11.36/share, this P0.22/share dividend, annualized, represents a yield of approximately 7.7%. That’s not bad.

AllDay Marts [ALLDY 0.47 4.44%] teases FY21 results with net income up 80% y/y. Manny V. said that the results “validate” ALLDY’s “value proposition” (he had said that ALLDY’s initial IPO result validated the offer price: ooops), and his daughter said that ALLDY’s results “befit” ALLDY’s first year on the PSE. It’s hard to see how 80% overperformance “befits” a stock that is down 48% from its 52-week high of P0.90/share, and down 22% from its IPO price of P0.60/share.

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.

“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.

LOCAL pork and beef vendor North Star Meat Merchants Inc. has filed for an initial public offering (IPO) to accelerate its expansion plans.

The company in a statement on Tuesday said it has filed its registration statement with the Securities and Exchange Commission last March 21.

North Star looks to offer up to 392 million common shares, priced at up to P10 apiece, with an overallotment option of up to 58 million secondary common shares.

The company aims to raise around P3.5 billion from the sale of primary shares from the offer, which will be used for the expansion of its end-to-end cold chain infrastructure and operations.

It also aims 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."

"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" Anthony Ng, North Star founder and chief executive officer, said in the statement.

The offer period is planned to run in June, while listing on the main board of the stock exchange is targeted before the end of the first half of the year.

BDO Capital and Investment Corp. was tapped as the sole issue manager and will also serve as the joint lead underwriter and bookrunner, along with China Bank Capital Corp.

"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 Francisco was quoted as saying.

North Star registered P9.28 billion in sales last year and has consistently grown with a compound annual growth rate of 39.7 percent since 2019.

Meat distributor North Star Meat Merchants Inc. said it looks to raise as much as P4.5 billion in the stock market.

The company which sells its meat products in SM Supermarkets said it looks to sell to the public 392 million common shares, consisting of 360 million primary shares and 32 million secondary shares, and another 58 million secondary shares to cover the over-allotment option at an shares of up to P10 apiece.

The company is offering for sale 25 percent of its capitalization post-initial public offering (IPO). It plans have its IPO in June, and targets to list its shares with the Philippine Stock Exchange before the end of the first half of 2022.

The company plans to use the proceeds of the primary shares worth P3.5 billion to accelerate the expansion of its end-to-end cold chain infrastructure and operations. It is also looking to expand its 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.

Anthony Ng, North Star chief executive officer, said the company generated P9.28 billion in sales last year, and has posted a compounded growth of 39.7 percent since 2019.

BDO Capital & Investment Corp. will serve as sole issue manager, and together with China Bank Capital Corp., will act as the joint lead underwriters and bookrunners for the IPO.

Ng said with the strategic decision to expand the Bulacan cold storage facility and the opening of the Cebu cold storage facility, North Star was able to increase its maximum storage capacity from 2.1 million kilos to 8 million kilos when the economy was in the midst of the pandemic. This expanded capacity is expected to be fully utilized as the company sees the reopening and growth of the hospitality and tourism industries.

North Star’s Bulacan plant is Triple A rated by the National Meat Inspection Service of the Department of Agriculture (DA-NMIS) and HACCP Certified.

Ng also said North Star looks to further strengthen its presence in the cold chain solutions sector by creating synergies with public entities such as the Department of Agriculture.

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.

North Star Meat Merchants Inc., one of the largest pork and beef vendors in the country, is planning to raise up to P4.5 billion from an initial public offering of both new and secondary shares.

In a statement, the firm said it has filed with the Securities and Exchange Commission (SEC) its Registration Statement for the offer and sale of up to 450 million common shares at a price of up to P10 each.

These shares consist of 360 million primary shares and 32 million secondary shares, with an over-allotment option of up to 58 million secondary common shares that will be used for the price stabilization activities.

North Star posted sales of P9.28 Billion in 2021 and has consistently registered a compounded annual growth rate (CAGR) of 39.7 percent since 2019.

As the total meat consumption of the Philippines grows, the firm is launching its IPO to accelerate the expansion of its end-to-end cold chain infrastructure and operations.

In addition, the Company is looking to expand its 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.

Subject to regulatory approvals, the IPO will pave the way for the Company to join the Main Board of The Philippine Stock Exchange, Inc. (PSE) and allow the investing public to participate up to 25 percent of its 1.8 billion outstanding shares after the offer.

The Company plans to run the offer period in June 2022, and targets to list on the Main Board of the PSE before the end of the first half of 2022. NSTAR expects to net up to P3.5 billion from the sale of its primary shares during the IPO.

“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” said North Star Founder and CEO Anthony Ng.

He added that, “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.” BDO Capital & Investment Corporation has been engaged as the sole issue manager, and together with China Bank Capital Corporation, will act as the Joint Lead Underwriters and Bookrunners for the IPO.

With the strategic decision to expand its Bulacan cold storage facility and the opening of its Cebu cold storage facility, North Star was able to increase its maximum storage capacity from 2.1 million kilos to 8.0 million kilos when the economy was in the midst of the pandemic.

This expanded capacity is expected to be fully utilized as the Company sees the reopening and growth of the hospitality and tourism industries.

Aside from advancing its expansion plans, North Star looks to further strengthen its presence in the cold chain solutions sector by creating synergies with public entities such as the Department of Agriculture (DA).

The strategic partnership with the DA allows for a contract growing arrangement with small sized pig farmers by North Star to be distributed to its customers with outlets nationwide, boosting the confidence of local farmers to maximize production capabilities.

He noted that, “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 1251 convenience stores nationwide” North Star will be the first meat and protein pure play in the equity market.

Meat trader North Star Meat Merchants Inc. (North Star), which has set its sights on capturing a bigger share of the country’s meat market, has filed paperwork for its P4.5-billion initial public offering (IPO).

North Star said it has filed with the Securities and Exchange Commission (SEC) its registration statement for the offer and sale of up to 392 million common shares with an over-allotment of up to 58 million secondary common shares at a price of up to P10 each.

The company said it is keen on accelerating the expansion of its end-to-end cold chain infrastructure and operations amid the continuous increase in the country’s meat consumption.

North Star is targeting to start the offer period in June and to list on the main board of the Philippine Stock Exchange (PSE) before the end of the first half.

The company said it expects to net around P3.5 billion from the sale of its primary shares during the IPO.

“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.”

North Star said its sales have posted a compounded annual growth rate of 39.7 percent since 2019 with total value reaching P9.28 billion last year. The company said its current cold storage capacity is at 8 million kilograms (kg) from 2.1 million kg after its expansion in Bulacan and Cebu.

The company supplies meat products to SM markets and the Waltermart Group.

The company engaged BDO Capital & Investment Corp. as the sole issue manager. BDO Capital and China Bank Capital Corp. will act as the joint lead underwriters and bookrunners for the IPO.

“I think many if not most of the investors would be surprised to note that they have actually been consuming North Star’s various fresh and frozen meat products when doing their grocery shopping or dining at certain restaurants and food establishments.”

MANILA, Philippines – Meat vendor North Star Meat Merchants is aiming to raise P4.5 billion through an initial public offering (IPO).

North Star on Tuesday, March 22, filed with the Securities and Exchange Commission its registration statement for the offer and sale of 360 million primary shares and 32 million secondary shares, with an overallotment option of up to 58 million shares. Shares will be offered at a price of up to P10 each.

The company plans to run the offer period in June, and targets to list on the Main Board of the Philippine Stock Exchange before the end of the first half of 2022.

North Star, which will have a stock symbol of NSTAR, aims to use the funds to “accelerate the expansion of its end-to-end cold chain infrastructure and operations.”

“In addition, the company is 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.”

Anthony Ng, North Star’s 42-year-old founder and chief executive officer, said, “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.”

BDO Capital and Investment Corporation is the sole issue manager, and together with China Bank Capital Corporation, will act as joint lead underwriters and bookrunners for the IPO.

Eduardo Francisco, president of BDO Capital, expects strong interest in the IPO “given North Star’s unique focus on the country’s meat sector and food security, its established and long-standing relationships with retail giants such as the SM group, and its unmatched scale of operations.”