Lucio Co earns 1.5 billion yen from sale of stake in brandy maker Alfonso

Entrepreneur Lucio Co made a windfall of 1.5 billion pesos from the sale of his stake in Alfonso brandy, Williams and Humbert SA.

Co, best known for its popular grocery chain Puregold, has sold its stake in a Spanish brandy maker to publicly listed alcoholic beverage distributor The Keepers Holdings Inc.

According to Abacus Securities Corp’s research note titled “Short Takes,” the transaction amount is more than double the €25 million Co paid when it bought the 30 percent stake from the Spanish company’s original owners in 2018.

We were expecting a lower price for the 50 per cent stake. First, it exceeds the net proceeds from the secondary offering last year, but more importantly, it indicates a much higher valuation of W&H (177.5 million euros on a 100 per cent basis) than when Mr Koo himself took a 30 per cent stake in 2018 vs. Only 25 million euros.

In a disclosure to the Philippine Stock Exchange last week, The Keepers said it has executed share purchase agreements covering the acquisition of 50 percent of Bodegas Williams and Humbert for 5 billion pesos.

The 30 percent was sold by Co and VFC Land Resources Inc. The property belonged to his family, while the 20 percent was sold by the Medina family who is the original shareholder in the company.

The €88.75 million acquisition is based on an independent evaluation by PricewaterhouseCoopers.

The broker said that the brandy maker’s earnings last year are not much different from the 2018 level, so the higher price may be due to a larger share premium or better prospects for the year ahead.

Abacus said The Keepers’ net profit could get a boost of about 400 million pesos a year, about 20 percent of its 2022 profit, due to the acquisition. It gave a “buy” rating to its stock.

The Keepers, the largest imported alcoholic beverage distributor in the Philippines, said the acquisition will strengthen the group’s competitive position, strengthen its grip and secure the company’s supply line for its brand and main category, Alfonso Brandi, which occupies a large part of its products. sales.

The investment will also transform the company’s business model from a purely trading company to a manufacturing and distribution company and will open up markets outside the Philippines.

The equity investment will also be accrued from his share of the future net income of Bodegas Williams & Humbert.

Bodegas Williams & Humbert is a respected family owned winery in Jerez de la Frontera, Spain, founded 140 years ago.

Image credits: www.thekeepers.com.ph

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