Philippines’ grocery operator MerryMart files for $31m IPO

Photo from MerryMart's website.

MerryMart Consumer Corp, the grocery operator owned by young tycoon Edgar Sia II, has filed to raise up to 1.6 billion pesos ($31 million) in an initial public offering (IPO) in the Philippines to finance its nationwide expansion program.

Sia, 48, the 28th richest person in the Philippines, is behind brands like Mang Inasal, which was acquired by Jollibee Foods Corporation for 2 billion pesos ($39 million) in 2016, and listed real estate firm DoubleDragon.

Based on a preliminary prospectus filed at the Securities and Exchange Commission (SEC), MerryMart, which opened its first store in April 2019 and is targeting 1,200 branches nationwide, plans to sell 1.6 million primary shares, representing about 21 per cent of the company, at 1 peso per share.

The offer period will be from March 23 to March 27 and the target listing date on April 2. The retail chain has mandated PNB Capital and Investment as lead underwriter, issue manager, and bookrunner for the offering.

“Our family initially had no plans to expand the retail business, but our recent experiences made us realize the need for us to be in the modern retail business, and we believe we will be in it while the transition from traditional retail to modern retail is still ongoing,” Sia earlier said.

MerryMart seeks to roll out a total of 1,200 branches nationwide to reach its systemwide sales revenue goal of 120 billion pesos ($2.36 billion). It plans to develop the brand through company-owned stores, as well as opening it for franchise to the public.

The company also expects to set up several MerryMart warehouses and distribution centers to support the MerryMart retail shops around the country and intends to locate these in DoubleDragon’s CentralHub warehouse complexes.

MerrMart’s IPO, if it pushes through, could somehow revive a weak public market in the Philippines. Last year, Metro Pacific canceled the listing of its hospital unit while consumer tech firm Cal-Comp Technology delayed a proposed $125-million IPO, citing market conditions.

Last year, however, ended with the $20-million IPO of Fruitas Holdings Inc, a food and beverage kiosk operator. The target, however, was lower than the initial figure of $23 million as the company said it had to trim the amount to ensure a “healthy performance of the stock upon listing”.

For the entire 2019, equity deals among companies listed on the Philippine Stock Exchange reached 95.22 billion pesos, less than half the amount of fresh capital raised in 2018, according to official data.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.