Philippine-listed conglomerate Metro Pacific Investments Corp (MPIC) has forayed into the logistics business after acquiring assets of four firms for over $46.3 million (P2.1 billion).
MPIC said, its subsidiary MetroPac Movers Inc (MMI) completed the acquisitions on Thursday which covered key contracts of the four logistics firms, namely Basic Logistics Corp, A1Move Logistics Inc, Philflash Logistics Inc, and BasicLog Trading and Marketing Enterprises.
The transaction also included the transfer of certain key officers and employees of the four firms to MMI.
The value of the deal was determined based on the appraised value of the assets and the potential earnings of the businesses.
MPIC’s board of directors approved the planned acquisition early this month.
“MPIC has concluded that there is merit in expanding into non-regulated infrastructure business. The strong demand for logistics services and the sector offers the prospect of attractive returns,” MPIC said, in its statement.
The Pangilinan-led conglomerate noted that a separate company will be designated by the four logistics firms which shall then acquire 24 per cent of the outstanding capital stock of MMI.
“MMI will expand its logistics business utilizing the assets and businesses initially acquired from the sellers,” MPIC added.
MPIC chairman Manuel V. Pangilinan earlier told local media that the logistics venture is also expected to benefit the warehousing requirements of the group’s existing businesses such as Manila Electric Co and PLDT.
MPIC recently reported a 7 per cent rise in consolidated core net income to P2.7 billion for the first quarter, ending March 31, 2016, from P2.6 billion in the first quarter of 2015 on the back of strong growth at all its operations.
The company said its core net income was lifted by strong traffic growth on all the roads held by Metro Pacific Tollways Corp and contributions from SCTEX and CII Bridges and Roads Investment Joint Stock Co, higher economic interest in Manila Electric Company, and continuing growth in the Hospital Group.
MPIC’s last trading price decreased 2.08 per cent or P0.130 to close at P6.12.