Bilyonaryo - Business

Bargain daw: Po bros’ Century Foods pay P24M to buy loss-making Swift hotdogs from parent firm

Century Pacific Food (CNPF) of the bilyonaryo Po brothers paid P24 million to take Pacific Meat Company, Inc. (PMCI), maker of Swift chilled meat products, out of the hands of its parent company.
The acquisition price is less than four percent of the P650 million announced by CNPF in March 2021 as payment to Century Pacific Group.
CNPF’s late patriarch, ultra bilyonaryo Ricardo Po, bought the Swift brand for P850 million from RFM of bilyonaryo Joey Concepcion in 2012.
PCMI was added to CNPF’s portfolio in April 2021, which includes its own manufacturing facilities, cold chain distribution, and pipeline of refrigerated products.
CNPF suffered a P19 million net loss in PCMI from April to December 2021 with P1.013 billion in expenses and only P994 million in revenues during the period. Had the deal been done in January 2021, CNP’s losses from PCMI would have reached P24.5 million.
PCMI, which reported an impairment loss of P34.7 million on trademarks in 2020, has a negative working capital of P538 million as of end-2021.
CNPF’s auditor, SGV & Co., considered the PCMI purchase as a “key audit matter as the amounts involved are material to the consolidated financial statements.”
SGV said the acquisition involved “significant judgments and estimates such as the identification and determination of the fair values of the assets and liabilities acquired, key inputs, such as revenue growth and discount rates related to the valuation of the trademark and the allocation of the purchase price to these assets and liabilities.”
CNPF pegged PCMI’s property plant and equipment at a P184 million or 46 percent more than its book value of P126 million; and its intangible assets (goodwill, intellectual property, and customer relationships) at P423 million or six percent over the carrying value of P400 million.
CNPF reported gaining P41 million from the purchase after pegging the fair value of PCMI P65 million less than its acquisition price of P24 million.