Universal Robina Corp. (URC), the food group of the Gokongweis, said it is buying Malaysia’s Munchy Food Industries Sdn Bhd for P22.9 billion or RM1.92 billion on a cash-free and debt-free basis.
In its disclosure, the company said the acquisition will make the local unit of URC in Malaysia the market leader in the oil-producing Southeast Asian nation.
URC Snack Foods Malaysia, the company’s local unit, signed an agreement with private equity firm CVC Capital Partners to acquire Crunchy Foods Sdn Bhd, the owner of Munchy Foods and Munchworld Marketing Sdn Bhd.
Crunchy Foods is in the business of investment holding and the manufacture, distribution, sales and marketing of biscuits, confectionary and related food products. It was incorporated on April 25, 2018 as an investment holding company.
The boards of directors of URC Malaysia and Crunchy approved the transaction on November 24 and the said transaction does not need board approval of URC. The deal is expected to close by December.
Established in 1991, Munchy’s is Malaysia’s top biscuit brand that has now flourished into a recognized and successful brand across the region. Munchy’s offers a wide variety of offerings across all key biscuit segments with brands that include Munchy’s Cream Crackers, Lexus Cream Sandwich, Oat Krunch, Muzic Wafer, and Choc-O cookies, are available in most retail outlets in Malaysia and more than 50 countries globally.
“Munchy’s, with its strong brands, talented organization, and operational excellence, is a great strategic fit with URC. Together, we will be able to further expand the footprint of URC and Munchy’s brands and unlock growth synergies in Malaysia as well as across the ASEAN region,” Irwin C. Lee, president and CEO of URC, said.
“This move will allow Munchy’s to have access to research and development expertise in multiple categories, enhance market knowledge, route to market, and manufacturing capabilities in countries outside of Malaysia. This will translate to development of innovative forward-thinking offerings to our consumers and strengthen our presence in the Asean market,” Rodney Wong, Munchy’s CEO, said.
URC reported that its profit in January to September rose 38 percent to P11.2 billion from last year’s P8.11 billion, despite sluggish sales.
Sales for the period reached P102.6 billion, up 3 percent from P99.61 billion last year.
“Operating income continues to be challenged by higher input costs and production inefficiencies brought about by Covid-related supply disruptions in several markets. However, higher pricing and cost savings initiatives helped reduce impact to margins,” the company said.