Puregold to fold in Company E

Posted at 03/26/14 9:35 AM

MANILA -- Listed supermarket operator Puregold Price Club Inc. on Tuesday said it will fold Company E, a small chain of grocery it purchased last year, into its operations in a move to improve efficiency.

The said move will be submitted for approval during its stockholders’ meeting in May, the company said in its disclosure to the Philippine Stock Exchange.

“Puregold is consolidating all stores catering to the same market group into one company. The merger is expected to result in a better inventory management, efficient cash management and simplified reporting to government agencies,” the company said.

Last year, Puregold, controlled by businessman Lucio Co, acquired Company E, the firm that used to operate retail chains such as Eunilaine and Grocer E, for P300 million.

The chain operates around 15 branches, all of which have since been converted into Puregold.

Unlike its closest competitors, the SM and Robinsons supermarket chains that have branches in most of its shopping malls and highly urbanized areas, Puregold has capitalized on stand-alone groceries situated near densely populated areas.

According to the company’s plan, it plans to further buy other smaller supermarket operators, which will feed the merger and acquisition plan of Puregold in the next two years.

Puregold said the acquisition price of Company E is 5.5 times of the estimated net income of the 15 stores under the Puregold management.

For the year, Puregold hopes to build at least 25 branches as the company said it will also focus on the end-users as it expects stiff competition from other bigger players.

As of end of the 2013, Puregold has a total of 205 stores.

The company’s recent acquisition was a minority stake in San Roque supermarket, a small chain of grocery that has branches in highly populated areas in Metro Manila and nearby cities.

Its unit Entenso Equities Inc. has acquired 49.34 percent of San Roque Supermarket, which has nine branches including in Novaliches in Quezon City; Tondo Pavia Street, Blumentritt, and Tondo Gagalangin in Manila; Malabon; Camarin in Caloocan; Imus, Cavite and Antipolo.